Saturday, February 26, 2011

Why the Rich Need to Ante Up

There has been a lot of excellent reporting and writing going on in the alternative press lately. I have and will continue to feature it on this blog. There is a deep class war going on in this country right now and so it is imperative to understand the lay of the land beyond what the government and mainstream media try to spoon-feed us.

One question I hear around my local community is: Why is it fair to expect the wealthy to pay a higher tax rate than others? Shouldn't we adopt a flat tax rate so that everyone is treated equally?

As Robert Parry explains, in part, in "The Solution to Our Budget Problems Is So Obvious: We Need to Raise Taxes on the Rich, ASAP,"
President Dwight Eisenhower’s inter-state highway system enabled companies to move their goods more cheaply; President John Kennedy’s space program spurred the growth in computer sciences; the Pentagon created the Internet (yes, with critical support from Al Gore when in Congress), which revolutionized commerce and spread information.

These innovations and many more were achieved by the federal government using taxpayers’ money. Yes, entrepreneurs in their garages and dorm rooms did expand on these breakthroughs and deserve credit and a share of the profits, but they also should pay back at a much higher rate for the taxpayer-funded R&D that made their fortunes possible...
You see, the infrastructure that paved the way for the rich to become rich was paid through tax dollars by you and me. It's like we provided them with a quick start-up loan and, now that we need them to pay it back, they want the loan to be canceled...unilaterally. They act as if the obtained their riches all on the own initiative and that we taxpayers played no role at all.

A good example of how taxpayer dollars pave the way to corporate profits can be seen in terms of the big pharmaceutical corporations. As Terry J. Allen writes in In These Times,
Our “socialist” president is doling out welfare payments—unfortunately, to one of the world’s most profitable and socially corrupt industries: pharmaceuticals. Barack Obama’s administration is ponying up $1 billion to create a new branch of the National Institutes of Health (NIH) designed to help Big Pharma develop new drugs...
So we taxpayers will underwrite the development of new drugs and the big pharmaceuticals will "pay us back" by charging us exorbitant prices for the drugs we helped them develop. To add more insult to injury, they will lead the charge for ever lower corporate taxes because they will say that it dampens innovation -- innovation that you and I pay for!

Another way you and I boost the bottom line for the big corporations are through a variety of non-income tax abatements. Ever notice how local communities compete for big business by offering a slew of property tax breaks and other goodies? The taxes they don't have to pay must be made up by someone else -- you and me again -- OR services must be reduced because of the greater stress on a constrained system.

In essence, the reason why it is ethically reasonable to expect the wealthy to shoulder a larger share of the tax burden is because the road they travel to their own pot of gold is built and paved by the rest of us. It is really as simple as that.


  1. Why is it only called "class warfare" when we fight back?

  2. Great article. Need more writing like this on sites that speak of important issues. And not just issues from another century.

  3. It's one of the big myths of capitalism, the self-made millionaire and such.

    They should pay more taxes into the system because they benefit the most from it. Simple as that.

  4. Matt,
    Because THEY control the media.

    True, yet it IS informative to see how those in the past dealt with the same basic issues.

    Yes, simple as that. :-)


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