Class is Key

 The Upper Class Controls Our Country's Wealth

American progressives will continue to struggle until we regain the ability to see that the fundamental division in our society is class. Class outweighs race and gender in importance although they too are important. Our upper class owns most of the household wealth in United States. The wealthiest 10% own about 67% of the total household wealth of the country and about 87% of the shares of stock.

The top 1% own about 29% of our country’s household wealth, and they control much more because they control our major corporations.  That 1% is our country’s oligarchy. They are the people who can make 7-figure gifts to political causes and political candidates. Because of their wealth, the members of this class have a great deal of political influence. We can see that influence in the policies of our current administration. Pres. Trump claims to speak for working Americans against a shadowy elite, but his signature tariffs are designed primarily to shift the tax burden from the wealthy to working Americans.

The Patrimonial Middle Class

Below the upper class is the group that Thomas Picketty has called the patrimonial middle class. This class includes about 40% of the population. It owns a sizable share of our country’s household wealth, but because the class is so big, its members own much less individually than do the members of the upper class. Members of this class dominate the Democratic Party and set the agenda for American progressives. Other members are staunch Republicans This is the class that most needs to revive its ability to see the importance of class in American politics.

The Working Class

Below the patrimonial middle class lies 50% of the population who own almost nothing. Lacking wealth, the members of this class depend entirely on their weekly or monthly earnings and on their employers for health insurance. Individual members of this class have little political influence. However, the size of this class and the tools of the internet can give this class political influence when it is organized and has leadership. The fund-raising success of Alexandia Ocasio-Cortez is an example.

Race and Gender

There are other important divisions besides class. Race is an important divider, and so is gender. Black people and women have struggled long and hard to obtain equality with white men, and those struggles are still going on. They have been extremely important in the United States for more than a century. In fact, they have been so important that they have obscured the importance of class differences in the minds of many American progressives.

I do not mean to say that we should ignore the needs of women or black people. Instead, we need to see that working Americans can rise together.  The struggle should not be seen as a struggle between working men and working women or between white workers and black workers. Instead, we need to remember who the real enemy is and focus on demands for policies that will help us all. Things like affordable childcare, affordable healthcare and baby bonds will help all working families and also narrow the wealth gaps between white people and black people and between men and women. Even the fight over abortion can be framed as a fight to liberate working families from the crushing costs of raising unwanted children.

Regaining a Progressive Focus on Class

The radical right loves to use the struggles over race and gender to divide progressives. If we are fighting among ourselves over issues like affirmative action at Ivy League universities, whether or not black people should be paid reparations, we are not uniting to demand a decent national healthcare system, free post-secondary education or affordable childcare. When we repeat endlessly that our country is run by old white men, we fail to notice that our pockets are being picked by rich people. It is true that many of those rich people are old white men but not all of them. Miriam Adelson is real, and so is Alex Karp. The upper class is mostly white, but that is not its defining characteristic. Its defining characteristic is that it controls the bulk of our national wealth and through that control is able to set the policy priorities of our government. We progressives will struggle until we regain our ability to see this basic fact.

No Property Taxes on Seniors: a Really Terrible Idea

 A Really Terrible Idea

 In the last couple of posts on this blog, I talked about the anti-tax movement that has caused the decay of our country and of our public services.  One particularly awful demand of the anti-tax movement is the demand to eliminate property taxes for old people like me. The demand takes two forms: one of them is a demand that people over 65 should pay no property taxes, and the other is that there should be no property taxes on a property if the mortgage on it is fully paid off.

Many Old People Can Afford to Pay the Taxes

These are terrible ideas for several reasons. First, many old people can well afford to pay the taxes. Some old people are poor and struggle to get by, and perhaps we should help them so that they can stay in their homes. We don't really need to kick poor people out onto the street. On the other hand, there is no reason to provide tax relief to wealthy old people who own large properties and they, of course, would be the main beneficiaries of these ideas.

Today’s old people own 51% of our country’s wealth. We have been the beneficiaries of a period of great economic growth.  Why should our good luck entitle us to special tax treatment? Moreover, we also consume public services just as younger people do. Why should our children and grandchildren - who have had less time to accumulate wealth than we have - carry the burden of paying for the services that we use?

Should People be Exempt From Taxes Because They are Rich?

The idea that that there should be no tax on a property when the mortgage on it has been paid off is even worse. Real estate property is a form of wealth; the more such property I own, the wealthier I am. What is usually called my "net worth" is equal to the value of what I own minus the debts that I owe. For example, if I own a house worth $500,000, but carry mortgage debt of $250,000, my net worth is $250,000. On the other hand, if I own the same house but carry no mortgage debt, my net worth is $500,000. In other words, the less I owe in mortgage debt, the higher my net worth is. Why should I be exempt from taxes just because I have a high net worth?

The Main Beneficiaries Would Be Rich People

If we ask ourselves who would be the main beneficiaries of the elimination of property taxes on old people or on properties with paid-off mortgages, the answer is obvious. The main beneficiaries would be wealthy old people who own large properties and have to pay big property tax bills. The image of a poor couple who have worked all their lives and now struggle to pay their property taxes is nothing but a screen to hide the real beneficiaries of these destructive policies. Rich people who are trying to avoid carrying their fair share of the tax burden are the people who are paying for the campaign to enact such policies. They do it because a reduction in property taxes would reduce their tax burden substantially. That is of course, the real reason for the whole campaign to eliminate property taxes on retired people. Rich people are paying for the campaign to reduce the taxes they pay. If it happens to reduce taxes for a few other people, the rich can live with that.

Working Americans Should Stick Together

Finally, we should note that the demand for these policies also has a destructive political effect. It divides working Americans among themselves. It encourages young and old people to fight against each other instead of fighting against the oligarchs who run our country and are gradually destroying it by choking off its revenue.  Let’s keep our minds clear and remember where our real interests lie!

The Ideological Roots of Our Country's Decline

The Story of the People Against the Government 

In last week’s post, I said that the United States is declining because we have lost the sense of community and shared destiny that must underly the willingness to pay the taxes needed to maintain our public facilities. We have come to see the taxes that we pay not as an investment in those facilities but purely as a burden that should be minimized. How did this come about?

It came about because the radical right in our country has seized on one of the strands in our political tradition and used it as the basis of an anti-tax campaign that has endured for decades. That strand begins with the story of the American Revolution as we usually tell it.

The American Revolution as we usually understand it was a rebellion by a people against a government and particularly against that government's power to levy taxes. We remember the Boston Tea Party and the “embattled farmers” of Paul Revere’s famous ride. We remember "No taxation without representation." Our revolutionary story is not a story of class conflict or of resistance to class oppression or even of social change. It is a story of people freeing themselves from a burdensome government. 

Of course, the American society of the eighteenth century had class differences and injustices, but they do not play a large role in our story as we tell it. The reason is that they did not weigh heavily on the Americans of the eighteenth century. The natural resources of the continent seemed limitless, and the labor force was small.  Wages were necessarily high, and people could escape from the injustices of the seaboard cities by moving to the frontier to carve out their own destinies. So, class conflict did not become an important part of our national story.

The Archetypes of Our National Consciousness

Instead, the people who moved to the frontier became the archetypes of our national consciousness. People like Daniel Boone, Davey Crockett and Jim Bridger are the heroes of our national story. We remember “Sweet Betsy from Pike” and her fellow pioneers enduring - as the song tells us - “starvation and cholera, hard work and slaughter” as they traveled west. Such people did not need much government in the story as we tell it. Each American was the architect of his/her own destiny.

The Depression Changed the Narrative

The Great Depression upended this narrative. Amid the suffering that the Depression caused, our government under the New Deal took on broad responsibilities for the welfare of the people including most famously Social Security for retired Americans. Later, we added civil rights enforcement and Medicare. However, The New Deal always had opposition from the very wealthy because it required government regulation of commerce and higher taxes to pay for the new services. The opponents of the New Deal were able to draw on the American tradition of opposition to government in support of their opposition to the New Deal.

Opposition to the New Deal and the Radical Right

Over the decades since, the opposition to the principles of the New Deal has become the radical right. The radical right has fed us the idea that government is necessarily bloated, inefficient and oppressive and that it should be minimized. As Grover Norquist famously said, "I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub."

Under pressure from the radical right, we have lowered taxes over and over again without considering how the government programs we depend on will be paid for. We have to some degree papered over the gap between the cost of the programs we want and the taxes we have been willing to pay by relying on government borrowing. That has worked fairly well for the federal government but not at the state and local levels. They have become more and more dependent on federal funding. Even the federal government is now running into problems caused by rising interest rates on the federal debt.

Our Public Services and Our Country Are Decaying

As a result, all of the public services on which we depend are decaying, and our country is decaying with them. We can reverse the decay only by reviving the ideology of solidarity that is another strand of our political tradition. We must remember Benjamin Franklin’s comment after the signing of the Declaration of Independence. “We must all hang together or we will certainly all hang separately.” We must remind ourselves that government is not only a burden. It is also the means by which we achieve our collective goals. We must remind ourselves that the development of our country has always depended on the contributions of government, How would the Midwest have developed in the nineteenth century without the Erie Canal? Where would our universities be without the Land-Grant University program? Where would our modern middle class be if the GI Bill had never been passed?