The GOP Tax Plan Is Coming for Us…

What happens in your stomach when you think about paying your taxes? A churning? Spasms? A nice, peaceful feeling? Perhaps more importantly, what happens in your head when you think about taxes? Confusion? Anxiety? A quiet, relaxed, soothing mood? Mostly, we only think about taxes when we’re forced to.

But soon the GOP tax plan will all over the news and we’ll be forced to think about it. If we want to have anything to say about it, that is. How are we going to respond? How much effort will we be willing to put into those responses?

Of course, it’s important that we respond and that that response be relevant and clear. So, to try to help us move in that direction, we’d like to present some background information to go along with what you already have. This will mostly be based on Les Leopold’s most recent book, Runaway Inequality: An Activist’s Guide to Economic Justice (Labor Institute Press, 2015). This book was chosen because Leopold is clearly a knowledgeable source of information and his writing is clear and based on hard data.

We’ll talk about what he means by "runaway inequality;" how it happened; how it’s affecting our pocketbooks, our politics, and our government; and what we might be able to do about it. We’ll spread this out over three or four blog entries.

Economic inequality is not a new concept. We heard a great deal about it from Bernie Sanders and Elizabeth Warren during the recent Democratic presidential campaign. The rich are getting richer and the poor are getting poorer. That’s the basic bottom line. It was also the focus of the Occupy Wall Street protests.

Leopold defines runaway inequality as “…the ever-increasing gap in income and wealth between the super-rich and the rest of us” (p. 1). Many of us could have come up with a near-equivalent definition on our own. But Leopold tells us we have no idea how large that gap really is. See if you agree. Based on U.S. Labor Department statistic data, as reported in the New York Times June 8, 2014, in 1970 the wage gap ratio between the top 100 CEOs and the average worker was 45 to 1. That means that if you, the average worker, owned one car, the CEO could own 45 cars. If you owned 1 house, the CEO could own 45 similar houses.

The size of that gap in 2013: 829 to 1! One can only imagine what it might be today. This isn’t common knowledge. But it should be, don’t you think?

It also ought to be common knowledge about how the gap came to be so large: who instigated it and who perpetuates it. Let’s take a quick look. Around 1980, there emerged a set of economic policies known as the Better Business Climate model. You may have heard of it. This "Better Business Climate" was well-named. It accomplished its goal to create a better climate for businesses in this country. It’s built on three pillars you’ll recognize immediately:

  1. Cutting taxes, especially on the wealthy and large corporations;
  2. Cutting government regulations, especially on high finance; and
  3. Reducing government social spending.

Sound familiar? These are the foundation of the current Republican proposed tax plan. The monetary benefits that went to corporations was expected to be reinvested in increased production and more jobs. Instead, it went to stock holders and into the pockets of CEOs. That model didn’t work in the ‘80s and it won’t work now. The destructive effects of that fiscal policy impacts all the major issues facing our country: health care, climate change, pollution, infrastructure, and foreign policy (just to name a few).

Our response will force us to consider how we think about the taxes we pay and how we think about the role of government in our lives.

More later.