History of Class War
One aspect of our current re-ignited American Civil War is getting a lot of air-play. It is so-called “class war.”
That's the tag-line ordered up by Roger Ailes of Fox News. The notion: that any talk of returning to 1990s tax rates - way back when the U.S. was healthy. wealthy, vibrantly entrepreneurial and world-competitive, generating millionaires at the fastest pace in human history - is somehow akin to Robespierre chopping heads in the French Revolution's reign of terror.
But in fact, "class war" has always been with us. If you ever actually sit down to read what people wrote in times past - for example Adam Smith in Wealth of Nations, or even The Holy Bible - then you know struggle and resentment between social castes was the normal state of human affairs for 6000 years, or much longer.
In fact, today's American perspective that there is no-such-thing as class - so blithely exploited by Fox News - seems rather quirky and charmingly innocent. Baby Boomers, especially, were raised under unusual circumstances -- perhaps the only stretch of time in which a great nation experienced a (fairly) flat social order.
Revolution in France
|All the shouts about "class war" bring to mind images of rabid Jacobin mobs in 1793 hauling brave nobles and gentlemen to the guillotine. But if Rupert Murdoch & Co. really wants us pondering that image, we owe it to ourselves to leaf back just a few pages in history to 1789, when the French Revolution began as a much more moderate thing, inspired by events across the ocean, in America.|
France was broke. Louis XVI and his ministers were incompetents who deliberately squelched commerce with internal tariffs and policies that crushed innovation. The church owned much of the productive land, tax-free. So did the feudal aristocracy. Top merchants and corporations managed to wrangle exemptions too. After years of quagmire wars, poor tax revenue, bank collapses and mismanagement, Louis needed more money to stave off bankruptcy and save the country. So he summoned the Estates General.
That was the rough French equivalent of the British Parliament, but with much less authority. In fact, it had last met in 1614. But Louis was desperate. What he needed was for the first and second "estates" -- the clergy and nobles -- to vote themselves a temporary levy and join the third estate (the people) in paying their fair share.
That's how it all started. The country's leader asking oligarchs and aristocrats to pay the same rates as common folk, for a while, especially since they already owned damn near everything. The answer given by the dukes and bishops and marquises? "Heck no! We're the ones keeping it all together. The managers and investors and owners and job-makers. The government can damn well keep its mitts out of our pockets. It's our money, not the State's!"
We know what happened afterward.
"Class war" has a whole lot more to it than they are telling you with their blithe, two-word nostrums over at Fox News. As Warren Buffett said: "My side - the rich - have been winning class war for some time, and it won't end well."
Across the sea in America
After our own Revolution a different experiment was being tried. The aristocracy over here -- like Washington and Jefferson -- certainly enjoyed being rich, and wanted opportunities to stay that way! But they also knew the frontier virtue satiability -- the notion that getting rich is great! Economic success can both entice and propel innovation, hard work, enterprise, competitive creativity and philanthropy. But that (as Adam Smith proclaimed in the miracle year 1776) there comes a point where enough is enough... and sometimes even too much.
The founders started by banning primogeniture, so no family fortune could sit and accumulate, undivided, as a lordly demesne at the pyramid's peak. Instead, they would get divided among the large numbers of children that folks had then -- an intentional act of "social engineering" and outright "leveling" -- and don't you for a moment think otherwise! They also seized the assets of the Tory lords and even neutral absentees and distributed them to the masses. And they made homesteading easy, with laws that favored Yeoman citizens.
"I would rather leave my son a curse than the almighty dollar," says Andrew Carnegie, who was the Warren Buffett of his day. Even a jerk like Henry Ford realized the essence -- that he benefited from a rising middle class that could afford to buy his cars (so he raised the minimum daily pay from $2.34 to $5 for his employees). And our agile nation came up with moderate solutions like anti-trust laws and progressive tax rates, that staunched class war without ruining capitalist enterprise. That kept the goose alive, to keep laying golden eggs.
It is the context of the positive sum game - the notion that we can get all the benefits of an enterprise-market system -- using the allure of wealth to reward innovators and vigorous competition -- while somehow preventing the toxic side effect of wealth... the poison called oligarchy. The same poison that ruined markets and freedom in every culture other than ours, in every other era than ours.
Wake Up Call
Is history really so boring to you that you find it completely irrelevant? So much so that you'll ignore the patterns of 6,000 years? If so, FDR sure did make a different world for Baby Boomers to ignorantly take for granted.
But the Gen-Xers and Gen-Ys and Millennials won't. They are waking up!
So don't fret, Boomers. Your children will rescue America. Not with violent class war, but with the kind of tweaking we saw from Washington and Lincoln and Carnegie and Teddy Roosevelt and FDR. (Three of them Republicans.) The kind that [levels the playing field] while continuing the miracle of competitive markets and freedom.
* This post was excerpted from the full article called Class War and the Lessons of History by David Brin
The No Class Tax Plan
With the No Class Tax Plan, Exxon-Mobil, who recently reported $45.2 billion in profits (the highest in U.S. history) would have had to pay an EFFECTIVE tax of 25% (the exact same tax rate as Sally's Lemonade Stand, who might have only earned $5.00). Instead, Exxon-Mobil paid ZERO in corporate income taxes (and Sally's was closed for not having the proper business license).
Johnny Depp grossed $100 million for starring in Alice in Wonderland and Charlie Sheen may get a $100 million settlement from Warner Brothers....and would have to pay 10% in personal income taxes (the same exact tax rate as those who only earned a combined TOTAL HOUSEHOLD INCOME of $43,000...the national average.)
You, me, the hedge fund managers, the bankers, members of Congress, the CEOs, and all the Fox News commentators would all pay the same exact EFFECTIVE tax rate...no more "class war".
Naturally, the Congressional Budget Office might have to tweak the actual percentages to ensure we receive enough revenues to cover actual allocations, but you get the drift. I personally, if I were earning $33,000 a year, and over the course of a year had to pay an additional $100 in taxes, I wouldn't mind at all -- so long as all the former tax dodgers were also paying their fair share....NO MORE CLASS WARFARE (at least, not in regards to the tax system). Corporations will still bust unions to pay sub-standard wages, and will still send jobs overseas for cheaper labor.
IMPORTANT TALKING POINT!
The CEOs of corporations claim that just because the company they work for has already paid a corporate tax (maybe), their wages that are paid as stock options (but not their base salaries) should not be taxed as personal income (or as capital gains) because their company has already paid a tax.
So then, if I took my weekly paycheck of $500 (after taxes were already deducted), then put it in a saving account or an IRA account and earned interest (or bought stocks from an online trader and earned dividends, or if the value of the stock went higher and I sold it), then shouldn't I also be exempted from paying any further tax, since I was already taxed in my paycheck?
"The rich (and the GOP) has more excuses than Carter has liver pills!"
* The No Class Tax Plan was conceived and designed by Bud Meyers, Blogger-At-Large