by Molly Ivins
ComradeTrump's dandy idea -- "Soak the rich!" saith the Donald, that l'il lefty -- has raised The Issue That Dare Not Speak Its Name. To wit, the obscene maldistribution of wealth in this country, also known as the Income Gap.
While Comrade Trump proposes a one-time 14 percent tax on everybody with more than $10 million to his name -- thus raising more than enough to pay off the entire national debt in one foul sweep -- Brother Bush is marching militantly in the wrong direction. Gov. Dubya wants more tax breaks for the rich. Sigh. Does not get it.
The biggest break for the rich in the Bush package is the elimination of the estate tax, which Republicans have now taken to calling "the death tax" in one of those public-relations ploys that they think will fool us all.
(One envisions a pod of Republican shrewdies brainstorming: "Let's call it 'the death tax!' Then they'll think everyone has to pay it, and that will make it really unpopular!" What kind of mushrooms do those people eat?)
It's still an estate tax, and it still applies only to those who leave more than $2 million per couple, so Junior gets his first $2 mil without paying anything. Then the government takes 37 percent of everything over that, sliding up to a top rate of 55 percent on truly major estates.
This is a sizable problem for all the Wifford Wasp Witherspoon IVs out there, but not noticeably burdensome to the rest of us. Besides which, you may have noticed that the flowering field of "estate planning" contains an astounding array of loopholes by which the very rich shelter their gelt from the tax man.
Next Bush proposes to flatten the income tax by moving from five progressive rates to four -- keep in mind that "flatter" means less progressive, which means less fair -- and then adds insult to injury by lowering the rate for the richest taxpayers even more than he lowers the rate for the lowest-income taxpayers, thus making the total system even less fair. According to Citizens for Tax Justice, two-thirds of the total tax relief in the Bush package will go to the wealthiest 10 percent of Americans. How Republican.
Now let's look at this suffering top 10 percent and see just how terribly much they need a tax break. Keep in mind that they have been getting tax breaks steadily since Ronald Reagan was elected in 1980, with the following consequences: By 1997, the top 10 percent of the population owned 73.2 percent of the nation's net worth, up from 68 percent in 1983. The figures keep moving rapidly, so by now it's fair to guess that less than a fourth of the nation's wealth is shared by the other 90 percent of us.
Even more staggering, a 1995 study by the Federal Reserve says the top 1 percent of American households (that's everybody with more than $2.3 million) own about 35 percent of the nation's wealth, and that figures get worse every year, too.
Looked at from the other side of the Income Gap, we find that those in the bottom 20 percent have actually lost ground in the '90s, while those in the middle have benefited only very slightly, while simultaneously piling up a staggering degree of debt. Why would anyone deliberately aggravate what is already a ridiculous imbalance?
We've just finished with a Congress that couldn't bring itself to raise the minimum wage by a whopping $1 over three years. And I remind you that the R's loaded even that pitiful gesture with $40 billion in tax breaks for the rich. Sen. Don Nickles of Oklahoma, that nasty man, even tried to use the minimum-wage bill to sneak in an additional tax write-off for the three-martini lunch -- what a highly developed sense of class justice he has.
(I call Nickles nasty because, according to The Washington Post, he is one of the senators behind a whispering campaign against John McCain, claiming that McCain is unstable because of the years he spent in a North Vietnamese prison camp. If that doesn't strike you as nasty, what does?)
Back to our man Trump. Being new to Marxist thought, the Donald has not fully grasped the finer points and wants to eliminate the estate tax himself. The bottom line for Comrade Trump is that his one-shot 14 percent wealth tax on those with more than $10 mil would cost him personally somewhere in the neighborhood of $350 million, but abolishing the estate tax would save him twice that. He may be a tyro leftie, but he's not stupid.
However, the notion of a tax on wealth bears close examination. Eleven European countries already have such a tax, including those devoted capitalists in Germany and Switzerland. As you know, in this country we tax only income, not wealth; but in Europe, they put a low tax (between 1 percent and 3 percent) on wealth in addition to income taxes.
According to Professor Leon Friedman of Hofstra Law School, writing in the current issue of The Nation, if we put a 1 percent tax on the total assets of the richest 1 percent of Americans (now there's a simple tax plan), it would net us $70 billion a year (more than half of what we take in now from all other sources), giving the feds a total of $200 billion per year with which to shore up Social Security and maybe even give a tax break to people who actually need one. Just 1 percent on the 1 percent.
Friedman points out one slight hitch in the getalong here: We'd have to amend the Constitution to impose a tax on wealth, just as we did to impose the first income tax back in 1913. Personally, I think it's worth doing. And I'm curious to know how many of those worth more than $2.3 million think a 1 percent tax is too high. Pollsters, can you help?
December 2, 1999 (http://www.monitor.net/monitor) All Rights Reserved. Contact email@example.com for permission to use in any format.
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