We need a revolution in government taxing and spending.
On the taxing side, this isn’t about bashing the rich, but about tax justice — witness Warren Buffet’s famous statement that his secretary is taxed more than he is, the recent open letter to 2020 presidential hopefuls by 18 “ultrarich” Americans saying they should be the ones to pay more taxes or the work of the organization Patriotic Millionaires, which helped support a conference last month in Washington, D.C., attended by 200 or so researchers, analysts, strategists and campaigners and titled: “Taxing the (Very) Rich: Finding A Cure for Excessive Wealth Disorder.”
The conference looked at the ways excessive wealth disorder is harming our environment, our politics, our democracy, the racial divide and more, though its core was found in 20 presentations exploring alternate ways to tax the very rich — focused mostly on the 0.1%, not the 1% — from wealth taxes to income tax surcharges to inheritance taxes.
Relevant to the spending side, we have a climate crisis, a health care shambles, inadequate housing, crumbling infrastructure, a shameful degree of hunger, skyrocketing college debt, insufficient early childhood education and more. As we saw in the first round of Democratic presidential candidate debates, various contenders have plans to deal with some of these problems; Elizabeth Warren and Bernie Sanders have plans to deal with almost all of them.
Not including health care, the sum total of dealing with all of these fundamental problems would cost about $1 trillion a year. This is substantial, but equals only about 5% of our GDP, an increase of about 25% in government spending, to be financed by taxes, deficit spending and reduction in military expenditures. Medicare for all, a system that all other rich nations have, would add more, but it would pay for itself and actually save money by reducing what American families are now paying for health care.
Whether this is “socialism” depends on your point of view. To me, it is more the fulfillment of President Franklin Roosevelt’s intended New Deal, only a portion of which got funded. We live in a world where, for the last 40 years, since Ronald Reagan, market fundamentalism has held sway, and the role of government has been vilified. Yet the market can’t solve the critical problems we face, and these problems are growing ever more serious. We need a revolution in thinking that recognizes that in today’s world, it is only through the collective and concerted action of local, state and national governments, as well as international organizations, that we will be able to thrive — or even to survive.
It is fashionable to say that governments are inept, but they have accomplished much — public schools, libraries, police and fire protection, astronauts to the moon, Medicare and Medicaid, roads and bridges, electrification and other utilities, national defense, Social Security, extending civil and political rights, food safety, worker safety and so on. We need to improve government, not try to get around it. The challenges we face and the programs to ameliorate them don’t exhaust what we need to do. For example, we should have national service for our youth, continued exploration of space, and, probably, a guaranteed annual income at some point given the projections of artificial intelligence and the automation of work. Of course, to do all this we would need to increase taxes on more than the top 0.1%, but the benefits would be huge.
For 40 years, we have been headed in exactly the opposite direction of what is needed. We need a sea change, and the movement of the Democratic Party to the left may well usher one in.
Steven J. Klees (firstname.lastname@example.org) is an economist and professor in the College of Education at the University of Maryland, College Park. His book, “The Conscience of a Progressive” is forthcoming.