- Bill Barclay, CPEG and Ventura DSA
As I argued in my first “Taming Capital” post, the political landscape defined by the 2018 midterms has reinvigorated the discussion of economic inequality and what we can or should do about it. The problem of inequality was a focus of the Occupy movement. It was also the core 2016 campaign message of Bernie Sanders – who just announced he is running for president in 2020. Like Warren’s wealth tax, Sanders understands that the obscene levels of economic inequality in the U.S. today cannot be countered simply by raising the minimum wage or a more progressive income tax structure. The concentration of wealth must also be addressed. And Sanders has put forth an important proposal for doing so – but also one that has a long history in the U.S.
Making the Estate Tax Real: Bernie Sanders
The really big fortune, the swollen fortune, by the mere fact of its size, acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes.
- Theodore Roosevelt, 1910
Over a century ago under urging from Theodore Roosevelt, Congress created the modern estate tax.[i] TR understood the need for an estate tax in terms that apply equally or even more so today: the problem of an inherited aristocracy based on private capital accumulation, arising from some combination of good fortune, innovation and, very importantly, coupled with institutional supports that allowed an individual to amass large amounts of wealth in a single generation. As TR argued, such inheritances were, for the next generation, free and unearned money. Not only were the inheritors of the next generation no more deserving of this wealth than any other citizen, TR believed that they would all too often fritter in away in lavish living – think of Paris Hilton, the $37 million dollar ranch that Bill Gates bought his daughter Jennifer because she likes to ride,[ii]etc.
Taming Capital? - Part 1
- Bill Barclay, CPEG and Ventura DSA
The midterms have not simply given the Democratic Party a majority in the House; they have visibly expanded the range of political discourse, the so called "Overton Window". This impact is particularly marked in terms of the issue of economic inequality. In the past few weeks, three major progressive - perhaps even socialist? - initiatives have been proposed. In chronological order, these are Elizabeth Warren's wealth tax, Bernie Sanders changes to the Estate Tax, and HR 1000, guaranteeing a job to all willing and able to work, a true "right-to-work." Each treads on what has been seen by the right as the prerogatives of capital. For those of us on the left, each raises the question of to what extent it is possible to intervene in the market allocation of wealth and income in a capitalist political economy, perhaps even altering the dynamics of capital accumulation and use the resulting revenues for social rather than private ends.
In this first post I'll look at Warren's for a wealth tax. The next two posts will analyze Sanders Estate Tax revisions and then HR 1000.
An Annual Tax on Wealth: Elizabeth Warren
Because it is unique in U.S. political discourse - and probably doomed whatever small chance she had of being the Democratic nominee for president - Warren's wealth tax proposal
could be considered the most radical of the three. The idea behind the proposal is conceptually simple: she calls for an annual tax on wealth with two rates: 2% on household wealth over $50 million and less than $1 billion and 3% on wealth over $1 billion. This is an unprecedented proposal for a nationally known political figure, because it places wealth, rather than income, at the center of the problem of extreme and growing inequality in the U.S.
There are several things to like about Warren's proposal.
National DSA, through the NPC, has initiated a process to begin considering the endorsement of a candidate for U.S. President. The process seems structurally sound and open. Here
North Star welcomes DSA’s new caucus, Socialist Majority. We agree with you on many issues and look forward to working with you to discover new strengths and then build a diverse, democratic, DSA.
Yours in Solidarity,
DSA North Star
The caucus for Socialism and Democracy