Last week, I put together a short video about the history of socialism in America. (In case you missed it, you can watch it here.) Whether you want to admit it or not, America is now, and has for some time been, a nation filled with socialism and wealth redistribution. It is how we pay for our common defenses, programs, and infrastructure. No matter how much conservatives and right-wing whacko’s decry the words themselves, socialism and wealth redistribution are as American as apple pie. As point in fact, elected officials of both parties understand that only through the collection of taxes (wealth redistribution) can America provide all the infrastructure, programs, and national defense (socialism.)
It’s always nice to have some forms of confirmation that I’m not out picking daisies in left field when I put forth these kinds of positions. So it was a pleasant surprise to read to articles this weekend that offered opinions similar to my own with regards to American socialism and wealth redistribution. Without reprinting the entire articles (which you should go and read anyhow), here are some salient points to consider…
The first I’ll share is from the San Diego Union-Tribune:
Is it really socialism to talk of “spreading the wealth”?
Actually, it has been part of the American economic system since its founding.
In a letter to James Madison in 1785, for instance, Thomas Jefferson suggested that taxes could be used to reduce “the enormous inequality” between rich and poor. He wrote that one way of “silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise.”
During the early days of the republic, the government relied mostly on tariffs to collect revenue, under the theory that since the rich bought most of the imports, they would pay most of the taxes.
“The rich alone use imported articles, and on these alone the whole taxes of the general government are levied,” Jefferson wrote in 1811. “The poor man, who uses nothing but what is made in his own farm or family, will pay nothing. (With) our revenues applied to canals, roads, schools, etc., the farmer will see his government supported, his children educated and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings.”
Although the income tax was abolished in 1872, the idea of using taxes to share the wealth remained an important part of the public discourse. Teddy Roosevelt was a vocal proponent of this idea in the early 1900s.
“I believe in a graduated income tax on big fortunes, and in another tax which is far more easily collected and far more effective: a graduated inheritance tax increasing rapidly with the size of the estate,” he said in 1910.
In times of economic peril, the tax rates were raised – rather than lowered – to ensure that money was more evenly distributed. During the Great Depression, Franklin Roosevelt’s administration boosted the highest tax rate from 63 percent to 79 percent in order to fund his New Deal programs. He pushed it to 94 percent during World War II.
Roosevelt was matched by Dwight Eisenhower in the 1950s, who, with the aid of a Republican Congress, maintained an income tax rate of more than 90 percent for top earners. It took Lyndon Johnson to lower the upper tax rate to 77 percent. It remained near that level until the second year of Ronald Reagan’s presidency.
But doesn’t a high tax rate strangle economic growth? It’s hard to make that case. During the 1950s, when the upper-income bracket was taxed at its highest peacetime rate in history, the economy grew at a robust 4 percent per year, using inflation-adjusted figures. The 1950s growth rate certainly did not occur because of the high taxes, but the tax rate apparently didn’t impede it.
“Every dollar spent by the government must be paid for either by taxes or by more borrowing with greater debt,” Eisenhower warned in the 1950s. “The only way to make more tax cuts now is to have bigger and bigger deficits and to borrow more and more money. Either we or our children will have to bear the burden of this debt. This is one kind of chicken that always comes home to roost. An unwise tax cutter, my fellow citizens, is no real friend of the taxpayer.”
Clearly, over this nation’s history until very recently, both major parties had candidates and presidents who understood that America’s real promise of a better life for all relied on both socialism and wealth redistribution. But the Republicans and theif frenzied fans can’t seem to concede the point, even when the evidence comes directly from their own mouths and actions.
From the New Yorker Magazine:
On October 12th, Obama gave one of his fullest summaries of his tax plan. After explaining how his tax plan would work, Obama added casually, “I think that when you spread the wealth around, it’s good for everybody.” McCain and Palin have been quoting this remark ever since, offering it as prima-facie evidence of Obama’s unsuitability for office. Of course, all taxes are redistributive, in that they redistribute private resources for public purposes. But the federal income tax is (downwardly) redistributive as a matter of principle: however slightly, it softens the inequalities that are inevitable in a market economy, and it reflects the belief that the wealthy have a proportionately greater stake in the material aspects of the social order and, therefore, should give that order proportionately more material support. McCain himself probably shares this belief, and there was a time when he was willing to say so. During the 2000 campaign, on MSNBC’s “Hardball,” a young woman asked him why her father, a doctor, should be “penalized” by being “in a huge tax bracket.” McCain replied that “wealthy people can afford more” and that “the very wealthy, because they can afford tax lawyers and all kinds of loopholes, really don’t pay nearly as much as you think they do.”
For her part, Sarah Palin, who has lately taken to calling Obama “Barack the Wealth Spreader,” seems to be something of a suspect character herself. She is, at the very least, a fellow-traveller of what might be called socialism with an Alaskan face. The state that she governs has no income or sales tax. Instead, it imposes huge levies on the oil companies that lease its oil fields. The proceeds finance the government’s activities and enable it to issue a four-figure annual check to every man, woman, and child in the state.
A few weeks before she was nominated for Vice-President, she told a visiting journalist—Philip Gourevitch, of this magazine—that “we’re set up, unlike other states in the union, where it’s collectively Alaskans own the resources. So we share in the wealth when the development of these resources occurs.”
Hmmmm…..McCain says higher incomes should mean higher taxes…at least he did back in 2000. And Palin governs a state where socialism (taking money from the big wealthy oil companies and giving it back to every person in her state) is the main rule.
Even the deniers of socialism and wealth redistribution, as we know and practice it here in America, are tied to our history, and not so subtly practicing the very things they now say will make Obama “unfit” to lead.
Pot. Kettle. Black.
(cross posted on Bring It On!)
