Progressive Taxation

A rant and a note on policy

This post is a response to Josh Slocum’s note on ending progressive taxation. Hopefully, he will not think I am dumping on him. I think I understand his reasoning, but there are problems that it will create if it happened. I just saw my own comment getting a bit long, perhaps overwhelming, which means this post. It comes from my frustration of people looking at parts of picture without looking at the whole, of not seeing how changes in one area will create unwanted changes in others.

We are having the same arguments that were have during the Progressive Era, which was a far more conservative time. Reinventing the wheel, really.

Progressive taxation comes from the Progressive Era reform of not overtaxing the poor and having the fortunate paying their fair share; it comes from the same idea of not taxing food, or at least the essentials as not everyone needs caviar, because everyone needs to eat the same amount just to survive. A man who barely afford food should not be forced to pay the same rate as as the owner of a mansion.

Like the inheritance tax, it was also considered a method of controlling the power of the oligarchs, who, as in the current government, controlled all levels of government and rhyming with Lord Acton, because money is power and power leads to corruption. And wealthy keep acquiring (perhaps, I should add to steal as well.) wealth to where all the wealth and other resources are effectively stolen from the rest of society. Most of the pushback against progressive taxtion in the century of its existence has come from the wealthy who were not satisfied with the often great wealth that they already had. This also is a cause of much of the destruction of the government via created incompetence of the regulatory state via regulatory capture; as an example, the FDA was created to prevent the reoccurrence of formaldehyde, sawdust, plaster-of-paris, and lead as well as other poisons in our food and water, after all; it is instructive to look at the ingredient list of food made for Americans as compared with Canadians and Europeans and to look at European and American bodies.¹ Please guess which is more profitable for the corporations and by extension the wealthy, Europe or the United States?

Even at the height of the Progressive Era, the goal was not to eliminate wealth as the era was very conservative both economically and especially socially. However, unless other… ways are used… (and can we all agree that they have too much power already?) the only real, even semi-permanent, way to reduce the power of the oligarchs is by reducing the differences in income and wealth. Or are we willing to go full on Stalinist, not socialist or even just communist, but Stalinist or Maoist level of brutal and lethal dictatorship? How about the German variety of fascism²? Because if the current reformers fail, we are likely to have American fascism, which is different than German or Italian forms, but an authoritarian, if not totalitarian, rule by a fusion of corporation and government, a brutal oligarchy, which will likely lead to a “communist” dictatorship.

Personally, while I am agitating for American style social democracy, while more in favor of democratic socialism, I am willing to accept the old New Deal Program because of the consequences, because of the practicalities. This means I am most in favor of what will work, not of what I am dreaming of. Again, I favor what will work, not of some fantastical, impractical, perhaps even disastrous goal, no matter how shiny it might be.

President FDR created his program to prevent either socialism, or worse, fascism. The American elites of the time grudgingly accepted. However, American and European corporations have been exploiting entire countries for centuries including during the Cold War, which led to the various “communist” revolutions. Most of the over one hundred governments overthrown by the United States were not acting in the most profitable way for foreign corporations³. There is also the fact that corrupt oligarchies and dictators would usually declare their dissents, protestors, and revolutionaries as communist agitators, ask the Americans for help, and then rearrange their countries’ economies to suit foreign corporations.

People became communist because only the communists were willing to help them fight their usually lawless, often brutal, and usually murderous rulers. If all reformers are labeled communist, no matter how mild the reforms being proposed, with most of the most moderate reformers either coopted by other more extreme reformers or murdered by the government, do not be surprised if the moderate center disappears with only the extreme hardline communists or the often corrupt, hardline fascists being left to chose from. This was a recurring pattern throughout the twentieth century, and with the end of the Long Twentieth Century (1914-2025), I fear its return.

Our ruling oligarchy and its own rulers, which are the oligarchs like Elon Musk, are obscenely wealthy. Their power must be reduced. Really, they must be broken, but since money is used to decide the division of power and resources on our civilization, the total wealth, as least as a percent of our society, must be reduced, if not eliminated. How should we do this?

We have several paths open that involve either relatively peaceful, often law adjacent, if not actually lawful, reforms, or we can have bloody, probably repeating, revolutions involving the gun and demagoguery. The comparison would be either the American Revolution or the French, Russian, and Chinese Revolutions; more practically, it will involve peaceful compromise, reforms, and the actual reduction in power (read wealth) of the current oligarchs including Elon Musk and all the othering in the Tech Brogarch and Big Finance including financial capitalism and that will require at least the drastic reform, if not the outright elimination, of capitalism in its modern condition.

Demanding that reforms not include that of increase taxation of at least the ultra wealthy is not going to happen unless reform is not the goal, but the appearance, maintenance, and growth of the American fascist state, which will necessitate the growth and strengthen of the current, very powerful American police state; a police state that does not need the government, but can be done through American corporations as was done through the 1930s, which was another reason for the New Deal as most people were afraid of the power (and private armies) of the corporations.

To conclude, I know enough to understand that I do not know enough to have a guide for practical actions, but I do know enough to understand that simplistic solutions without regard to all the consequences will be a horrific disaster.

1. After the tobacco settlements, American tobacco companies bought most of the food companies and modified the food using the same methods they developed to make cigarettes more addictive and lethal. Tobacco has always been innately harmful as well as addictive, but Big Tobacco found ways to make them more innately harmful because it was more profitable to do so. So too with our food. The goal is to reduce costs and increase consumption creating more profit while capturing the regulatory agencies to allow this to happen; the agencies have been underfunded by Congress and partially funded by the corporations for decades under the guise of saving the taxpayers money. That this give the corporations the power to destroy the effectiveness of agencies like the FDA is elided. It also gives talking points to those who say that government is an enemy to such a degree that it must be eliminated using the incompetence and corruption created by the corporations via legislation imposed at Congress’ paymasters behest.

2. The Europeans got most of their practical racism as wall as some of their ideas for fascism from the Americans, not the other way around. Social Darwinism is an American-British construction after all. All of this has supported American foundations and corporations since before the Twentieth Century, a few of the original ones you will see in PBS and NPR lists of funders. Corporatism and racism has a long history in the United States of America.

3. The article by Wikipedia is sanitized. It lies by omission. The United States has overthrown an average of one government per year since 1947. This is not to mention the coups and invasions before the Second World War. There are good reasons why the rest of the world laugh at our declaration of support for democracy.