America & taxes

Chomsky on how backward America is when it comes to taxes.

“I would like to electrocute everyone who uses the word ‘fair’ in connection with income tax policies.” — William F. Buckley, Jr.

’Tis impossible to be sure of any thing but Death and Taxes – The Cobbler of Preston by Christopher Bullock

Maybe it is because America fought a war over taxes that taxation has such a bad rap in this country. The only thing I hate about taxes are is annually preparing them. Personally, I don’t mind paying my fair share of income tax or gas tax or tax for other goods and services. I never have minded this seemingly Un-American duty. When I gazed upon the stub of my very first check from Taco Bell, I truly believed the funds pulled out of my gross pay was going to something worthwhile and/or necessary.

My introduction to the “evils” of taxation came when I voted in my second election. It was 1978 and Proposition 13 was the biggest item on the ballot. Prop 13 was the property tax revolt initiative introduced by Howard Jarvis and Paul Gann that radically changed California tax code–many people would later say for the worst. Though I recall my father, a Democrat at the time, was a big supporter of the initiative. I was neither aware of the damage the passage of the measure would reap down the road nor why the voter referendum was so popular. (Though many years later my father would say that property taxes were out of the control and Prop 13 fixed the problem.) I assume there was truth in that, but around the time the initiative was placed on the ballot, my father was on his way to becoming a Reagan Democrat and then a full-blown Rush Limbaugh-listening Republican so he may have also been on his way to being more fiscally conservative.

I am guessing I parroted my father’s ballot choices on many of the candidates and initiates on the 1976 and 1978 ballots. Sometime before the polls opened in those two elections my Dad, Mom, and I would sit down at the dinner table with our sample ballots and my Dad would give his reasons why he was voting for what candidate and for what initiative. I remember him stressing how we should all vote for the same things or we would be “canceling out” each other’s votes. My Mom would always tell me later with a wink that she was going to vote for whomever and whatever she wanted. Still, I didn’t understand anything about property taxes only that I didn’t pay for them. I also didn’t understand where the tax money went. Over the years I would figure it out with law enforcement and fire departments experiencing budget cuts, with people being thrown out of the apartments due to no rent control, and the State has to resort to the lottery to prop up our depressed schools. Wealthy neighborhoods were able to supplement their State education funds with local taxes that bolstered neighborhood public schools. The creation of charter schools also helped the affluent districts while negatively affecting depressed districts. Schools in depressed areas have to depend mostly on State taxes that Proposition 13 gutted. The long-coming teachers strike in Los Angeles is an example of counties taking back some of the monies lost due to Prop 13 and charter schools in rich school districts. The teachers tentative got back more nurses, more counselors, got more middle-school and high-school librarians and the teachers received a 6% raise. Will this raise taxes in Los Angeles County? I can’t see how it wouldn’t, but we are talking about our future. First Chicago, then West Virginia, then Oklahoma, now L.A. with strike talk happening in Denver and Oakland. We are seeing a reckoning a long time coming. Hopefully, this trend will ultimately affect the entire K-12 public schools in the U.S.

I learned another lesson on how fickle Americans can be when it comes to taxes and what taxes can buy or save on a local level. A couple of years after I most likely followed my father’s lead and voted Yes on Proposition 13 I became an employee of Tower Theatre–one of the last classic movie palaces in Sacramento at a time these kinds of theaters where closing down across America and video rental shops like Blockbuster, Hollywood Video, and Redbox were on the rise. While working as part of the floor staff I would hear older patrons go on about The Alhambra–a true movie palace that harkened back to the Golden Age of Hollywood. When it fell into disrepair in the early 1970’s Safeway Stores purchased the property and building to develop one of their supermarkets on the site. As Matias Bombal, local cinema impresario explained the doomed theater’s fate in a letter to the editors of Sacramento News and Review dated March 28, 2004:

“The blow was not delivered by Safeway, but by the people of Sacramento. Safeway Stores, upon hearing the tremendous public outcry of its potential destruction, offered the building and property back to the City of Sacramento for exactly what they paid for it. A special bond measure election was held to raise money to buy the property, and Sacramentans, likely not interested in additional taxes at that time, voted against it. With no acceptance by the City or any private party to buy the Alhambra, Safeway proceeded with their development.”

Safeway had the new store’s entrance designed in a vague homage to the movie palace’s front and it retained the water fountain now in the south side of the parking lot, but for many, these were hollow gestures. Now people pine about the long-gone movie palace, but I always wonder if some of the people bellyaching about the theater’s demise long for it, but not the tax that would have saved it from the wrecking ball. Apparently, at the time most people were watching their wallets and not the big silver screen.

I spent most of my adult years a political junkie, I spent most of the 1990s politically out of it while my wife and I raised a family. It was in 2000 with the election of George W. Bush I jolted back into politics especially when Bush doled out a huge tax cut for the rich and started two wars on a credit card. Before he left office when would me deep in debt. I became even more in tune with politics in the 2008 presidential election. Around that time, I recall all kinds of chicken little comments revolving around candidate Barack Obama, the U.S. Senator from Illinois. Besides the dog whistle racism, there were the fears that he was a socialist. While I hadn’t become a Democratic Socialist yet, I knew Obama was not a socialist–far from it. I recall an interview with the now disgraced Bill O’Reilly. The host’s opening comment went something like, “You’re a big tax-the-rich guy.” I looked up the video on YouTube and was reminded of Obama’s reply, “[chuckling] Just you, Bill.” I recall remembering that O’Reilly was the highest paid TV announcer of the time. Only a handful of primetime anchors make anything close to that amount, but the amount of money seemed ridiculous. (I will come back to this point later.) Why do the networks pay out that much for a talking head? It’s not as if they are professional athletes. (And don’t get me started on how much athletes get paid.)

As it turned out Obama really wasn’t that big of a “tax-the-rich guy.” True, taxes did increase a little to pay for the huge Affordable Care Act, but that wasn’t much compared to all the right-wing hype. Obama followed the Clinton centralist Democrat playbook, fiscally being about as center-right as any president since Reagan. Now, only social issues separated the two parties. Obama’s cabinet was a who’s-who in neoliberalism: Lawrence Summers, Timothy Geithner, Tom Perez, Hillary Clinton, Rahm Emanuel. Still, it was all the birthers, dog-whistle politics, and the unfounded “weak on Putin” crap that pissed me off. What is wrong with being a tax the rich guy, anyway (even if you’re not)?

It was Obama’s (and let’s not forget W’s) decision to bail out the banks with taxpayer money that helped birth the Tea Party movement. Or at least that is what most people like me believe. We know now that, unlike the later Occupy Wallstreet movement, the Tea Party movement was mostly Astroturfed, or as the historian, Thomas Frank put it: “Never has there been a phonier, more transparent bid to mislead an angry public. Supposedly a protest against bank bailouts, it was actually launched from among the futures traders on the floor of the Chicago Mercantile Exchange—and then backed to the hilt by Beltway libertarians looking for a way to distance themselves from the badly damaged Republican brand.”

I didn’t like the Tea Party movement, but I was too busy at the time feeling betrayed by Obama and Democrats. I felt the party had lost its political courage. When the catastrophic 2010 midterms came around and the recession deepened I was ready to leave the party. I was looking for someone to believe in. Barack Obama did more to push me to the left–the real left than anything else. I hadn’t read The Nation since my college days. I began reading it every week now. I found some hope in its pages or maybe all it did was rile me up. I was introduced to the Democratic Socialists of America (DSA)–I immediately became a member. I also discovered Bernie Sanders and his newly published book The Speech, the transcript of a nearly nine-hour filibuster by the Independent U.S. Senator from Vermont in December of 2010.

The filibuster was so inspiring that the volume of viewers watching the now historic speech on C-SPAN crashed the Senate server. Sanders had been around for years and I found articles in The Nation that went back to the days he was the radical Mayor of Burlington, but he was brand new to me thanks to the myopic mainstream press. Bernie was a member of the DSA. I also liked how he went after corporations and the ultra-rich. I bought and read The Speech in a record time for me. Then, I sought out the C-SPAN video of the filibuster, downloaded it on to my PC and watched it–mesmerized–over two nights late into those evenings. For me, Sanders was the voice crying out from the neoliberal wilderness (though I didn’t know what “neoliberalism” meant at the time). After reading the book and watching the filibuster, I began spending more time on YouTube looking for more of Sanders speeches and interviews. To be honest I really don’t remember when I found the video below of Elizabeth Warren that reiterated what I have thought about taxes for quite some time now. It appears to have been taped in the Bush years, but I think I found it later. I’m not sure now. It predates Warren, the U.S. Senator. Perhaps it was when she was an Obama appointee. Whatever its release time Warren’s take on taxes is spot on.

Elizabeth Warren broke the internet with this foggy-looking video.

Later, during Bernie’s 2016 presidential run I heard conservative friends and associates complain that Bernie wanted to give away “free stuff.” I pointed out that the “free stuff” they were referring to were critical in getting the economy and the poor and middle-class prosperous again, but all they saw were higher taxes. My retort was higher taxes for whom? Not us! This “free stuff” was to help educate and assist the people who keep the economy rolling like Elizabeth says in the video. It is frustrating how so many people–especially conservative, but mainline Democrats, too–think a healthy economy has absolutely nothing to do with taxation that keeps public services firing on all eight. When the attacks on Sanders’ “free stuff” were less abusive, they tended to be patronizing: an otherwise very intelligent, conservative, woman who works in a cubicle near me was so concerned that all these millennials were cheering for Bernie and all the things he promised (e.g. free public college education, college debt forgiveness, Medicare for all, paid family and medical leave, creating a jobs program, $15 an hour minimum wage, strengthening and expanding Social Security, et al.) with no way of generating the revenue to pay for these these things except through raising taxes. I kept my mouth shut. I knew the answer. Sanders had laid out how these services would be funded, but the mainstream press and especially Fox News (which I assumed this otherwise smart woman was getting her news spoon fed to her conveniently left out the part of Sanders’ plan. Bernie has explained how these programs would be funded, I could send this link to anyone who thinks these ideas are foolish, but it is far worse to think we should stay the course and what the middle class continues to shrink. When Sanders wasn’t speaking about this “free stuff” he wanted to give away to undeserving citizens who were strapped with debt or sinking below the poverty line he was talking about corporate taxation, taxes on Wall Street speculation, estate taxes, and other taxes that made the candidate the target for smears by the DNC, the Washington Post, the New York Times and the nearly every other mainstream media outlet.

The best things that came out of Bernie 2016 were the progressive political action organizations Our Revolution, Brand New Congress, and Justice Democrats, and one of the candidate’s organizers: Alexandra Ocasio-Cortez. Ocasio-Cortez ran and defeated the ten-term incumbent Congressman, Democratic Caucus Chair Joe Crowley for the New York’s 14th Congressional District. From there she easily defeated her Republican opponent in the general in 2018 and at age 29 became the youngest woman to be elected into the Congress. As a freshman Congresswoman Alexandra Ocasio-Cortez (or AOC) would float the idea of a progressive marginal Federal income tax to Anderson Cooper on CBS’ 60 Minutes. A kind of tax rate we have not seen in this country since the 1970s. AOC told Cooper, “If you look at our tax rates back in the ’60s when you had a progressive tax rate system, your tax rate, let’s say, from zero to $75,000 maybe ten percent or 15 percent, et cetera. But once you get to, like, the tippy tops–on your 10 millionth dollar–sometimes you see tax rates as high as 60 or 70 percent. That does not mean all $10 million are taxed at an extremely high rate, but it means that as you climb up this ladder you should be contributing more.” That last sentence is critical since Cooper suggested AOC is a “radical.” This from a man who makes $12 million annually. Fox News’ Sean Hannity was outraged by AOC’s suggestion and misquoted her tax idea multiple times to Fox’s angry, white middle-class viewers. By the way, Hannity is reported to pull down a ridiculous $36 million a year.

AOC on the Late Show with Stephen Colbert

Above AOC explains–again–how a marginal tax rate works, this time on the Late Show with Stephen Colbert. The graph below is a visual history of how this country taxed the rich. Things went all to hell when Reagan took office. After AOC floated the marginal tax reform, I found two of my favorite podcast hosts talking about it. Jeremy Scahill on Intercepted brought up the subject of marginal tax rates with Stephanie Kelton, the popular economist and adviser to the Bernie Sanders 2016 campaign. Listen here at the 31:40 mark. Also, Richard Wolff talked about it on his January 23, 2019 installment of Economic Update. Pick up Prof. Wolff’s discussion about tax reform at the 15:28 mark. But most remarkable was Jamelle Bouie’s piece in the Op-Ed section of January 28, 2019, New York Times. Bouie’s writes how inequality has highly negative consequences on society and that AOC’s marginal tax reform idea, Elizabeth Warren’s tax plan, as well as many of Sanders ideas are gaining traction because the fact that “trickle-down” economics has never worked, that a healthy middle-class is what creates jobs by purchasing good and services which in turn creates more demand that results in jobs growth and higher wages. Since Occupy Wall Street and especially since the Sanders campaign and the wake of activism that has followed more people are figuring this out.

On a personal note, I don’t think anyone in my family (with the possible exception of my two sons) sees the world the way I do. My brother is a wealthy fiscal conservative. When my father was alive we used to argue over politics until we both come to the conclusion that neither of us is going to change the other’s mind so we stopped. The last political exchange we ever had, I think, had to do with a draconian budget proposal by Paul Ryan. My dad liked it and wanted to know what I thought. I just now qualified it as “draconian” so the reader knows how I felt about it. Still, I held my tongue and said something like I don’t know much about it and the subject was dropped. The last time I tortured a family member with my politics it was about income taxes and my mom was the victim. She told me that an affluent family we have known for years moved to Nevada because the income taxes were more favorable. I knew it was none of my damn business, but it just rubbed me the wrong–a well off couple spending virtually their entire lives in California enjoying all that the state has to offer–much of it due to taxes. Then move across the border. I know that’s not as bad as millionaire tax shelters, offshore accounts, et al, but it still–emotionally if not intelligently–rubbed me the wrong way. I made some comment that I bet they could handle paying the State taxes considering what they got out of the State over the years. It was a dumb argument, I know. I just got turned off how a wealthy family who I assume are pretty much set for life wants more. My mom snapped at me about how it was their money and they could do what they want with it. I shut my mouth at this point and salvaged our lunch date.

Every once in a while, I run into David, a lobbyist for the Howard Jarvis Taxpayers Association motoring his way to the Capitol on his electric wheelchair. David is a fellow Christian. We met through a Bible study I used to attend at the State Capitol and it is mainly because of this connection I say hello and ask how he’s doing whenever I see him. I feel a little shame that I have a bad taste in my mouth whenever we exchange hellos. It’s an especially bad feeling because he is a perfectly well-mannered individual and if you asked him about me I am sure he would say that while he doesn’t really know me very well there is absolutely no animus between us. But for me, that’s not completely true. Back when we were in the Capitol Bible study he would make a comment every occasionally that rubbed me the wrong way. Maybe it was about the homeless problem or welfare. A better person–a better Christian–might confess his ill feelings and then hope the two would talk and pray it out, but I hold my tongue and just stew in it. I know he wouldn’t say anything stone cold about people less fortunate than us, but I’m pretty sure he would say or may actually have said something like “the State shouldn’t be responsible for the homeless, people below the rising poverty line–the church needs to step up.” (The church–as if it was a monolithic entity with a large budget and enough service workers to pull off these needed services so conservatives who don’t want their tax dollars going to the destitute can sleep at night knowing “The Church” is at work–regardless of they are putting any scratch in Sunday’s offering plate. Then again, maybe it’s my prejudice against his lobby firm he works for. I seem to think of Howard fucking Jarvis every time I see David motoring towards the Capitol or his office. As long as I envision depressed and overcrowded schools with overworked and underpaid teachers, Howard Jarvis pops into my head.

When I see David in his wheelchair riding from his office to the Capitol or back, or drinking a latte at Oblivion Comics and Coffee I have the opportunity to talk politics, but I envision him sounding like one of those anti-gas tax initiative commercials or telling me how the California Lottery is filling the gap his crappy Prop 13 created. (He’s younger than me by well over 20 years. He wasn’t born when the tax initiate made it on the ballot.) Yeah, I know, I need to let this go. It’s a free country, right? Not only that, we’re supposed to be hermanos en Cristo, for Cristo sake. Still, I marvel how people don’t want to pay for anything that just might help the community at large and especially the less fortunate if it means forking out some of their own earnings.

Taxes, especially fair income taxes, estate, taxes in the form of offshore penalties, taxes on capital gains, and dividends taxes can be great equalizers. And, yes, I do believe you can have too much money regardless of what you do for a living. Though there are plenty of rich people who would disagree with me. Enter billionaire Howard Schutz of Starbucks fame, who thinks he can make America great again by running as an independent centrist and hopefully defeating all the Democrats that are now jumping on the progressive tax bandwagon. President-hopeful Starbucks calls the tax ideas of AOC and Warren “punitive.” No shit Schultzy, you’re a fucking billionaire! Any truly progressive tax plan is going to make Daddy Starbucks feel like he’s been kicked in the balls every April 15. And downstream the least of us will see improvements. I’m all for that! If you ask U.S. Senator (and possible presidential-hopeful) from Ohio, Sherrod Brown he would call Schultz a “total idiot.” or as Robert Wright in his The Mindful Resistance Newsletter (January 27-February 2, 2019) said it a bit more decorously “If you’re a billionaire, and you live in a country that’s in the throes of a populist revolt on both the left and the right, and the country is being run by a guy who figured being a billionaire qualified him for the White House and is now widely loathed, maybe you should sit this one out.”

I know everyone has a right to their own opinion, but whenever someone like Schultz or one of those grossly over-paid news commentators or one of the mouthpieces of the Koch Brothers, the Walton family, or Sheldon Adelson offer their two bits about taxes and economics it rings so utterly self-serving considering these are the people who have the most to lose while their fellow citizens living in abject poverty just may benefit from a more progressive tax plan. I seriously doubt David, the low-tax lobbyist I see occasionally, would agree. Perhaps one day I’ll broach the subject the next time we run into each other in Oblivion and maybe even talk over cappuccinos. I could ask how his wheelchair handles the potholes of California streets only to find that he was not happy how Prop 13 played out. I’d sip my cappuccino feeling like a dick, ah, but a tax-the-rich democratic socialist dick!