Greetings all!
This post comes amid serious political debate in the
United States over gay marriage. Protests have erupted mainly in Washington DC
both for and against gay marriage, and the Human Rights Campaign has started a
wave of changes in Facebook profile photos in support of LGBT rights. And,
while I feel more strongly about this issue than most anything else at the
moment, I have already made my position clear. I support the absolute equality
of marriage on a federal level; no couple should be denied the right to marriage
or the benefits said marriage entails no matter what in my eyes. Instead of
writing further on this than I have in the past, I have decided to address
something that mostly goes forgotten in debates and is shoved aside when
presented. Tonight, I will address why we cannot forget inequality among the
rich and the poor, in any nation.
Inequality is a mostly ignored issue in America; our
capitalist model is more fixated on an unimpeded market than social benefits.
The reasoning for our sidelining of inequality comes from Ronald Reagan,
unsurprisingly. It begins in 1976, when Reagan coined the term welfare queen in
a speech where he described a woman as follows: "She has eighty names,
thirty addresses, twelve Social Security cards and is collecting veteran's
benefits on four non-existing deceased husbands. And she is collecting Social
Security on her cards. She's got Medicaid, getting food stamps, and she is
collecting welfare under each of her names. Her tax-free cash income is over
$150,000." While grossly
inaccurate, the truth (or lack thereof) of Reagan’s words
resonated with individualist Republicans of the time. The New Conservative
movement was beginning, one which would challenge egalitarianism in America and
effectively win.
Reagan lost the 1976 election, but won in 1980. He
then embarked on two full terms of selling America to businesses and selling
out common people in the process. National welfare programs were reduced drastically
in an effort to essentially remove the Great
Society completed by LBJ in the 1960s. And while
conservatives championed this change as fighting abuse of public funds by
ensuring every person works and gets what they deserve, it damaged every
worker’s right we ever fought for. We never put much effort into restoring
these rights again; after Reagan left office, Bush Sr. took over and did
relatively little. Clinton did make reforms, stating that he was “changing
welfare as we know it,” but in reality this likely only exacerbated the problem
by encouraging welfare-to-work programs that needlessly stress and damage those
whom need our help the most. While a growing economy in the 1990s did lift some
from poverty, the environment around those in it was increasingly restrictive.
The years of the next Bush presidency made
inequality a niche issue; our budget was pushed towards national defense,
especially with two new wars on the credit card. But now that these wars are
ending and we have the chance to change, we should.
It is often argued that inequality is a natural part
of a free market economy, and that we therefore should not interfere. I have
trouble seeing the free market as some all-powerful force, however. If the free
market is always right, then no government regulation would be logical or
necessary. Slavery could be pushed because “the market supports it.” There are
many things which are endemic in capitalism which we regulate anyway. We do
this because it is in the public interest to do so. We regulate our food
production industry so that our meat is not grossly contaminated and unfit for
consumption (although we clearly need more regulation on this front). We
regulate the gun industry so that citizens don’t get their hands on anti-tank
weaponry. We regulate jewelry so that people do not purchase blood diamonds. We
do this because we wish for people to be safe and secure in their purchasing
options in America. We cannot depend on every single person to know for
themselves about these things in their day-to-day lives; to do so would be
putting a great deal of unfounded faith in humanity.
Even if inequality were natural, that does not mean
we shouldn't try to alleviate it. The fact of the matter is that inequality is damaging
to our economy, and the more unequal we are the more damaging it becomes. We
already post a Gini Index score of 45.0, just a step worse than Iran on
equality. That’s right, we are worse than our greatest geopolitical foe when it
comes to inequality. Even though the Iranian state is laden with sanctions, bureaucracy,
and subsidies, it still manages to pull more of its poor to a better status
than we do. I will grant that being poor in America is definitely better due to
the lack of Islamic theocracy, but with Christian conservatives trying to
impose religion on governance more and more these days we are not as far off as
we should be.
But what can we do, and how far should we go? I
redirect us to the Gini Index, where Sweden has the lowest
score among 136 recorded nations. As such, Sweden is the most equal country
on record so far, although comparable nations like Norway jockey for that
position frequently. The Swedish welfare state is one of the most extensive—and
well-funded—endeavors among first world economies. In total, the average Swede
gives about 70%
of their salary in taxes away (yeah, you heard me). In return, healthcare and
education are free. The social security system has more than enough money to
pay for elderly care for all Swedes. Most common worker’s benefits, like
maternity leave and vacation days, are greatly extended without trouble to
businesses. Significant opportunities are given to Swedes of all economic
strata. And while not a perfect system (the Swedish economy is vulnerable to
swings in export prices), it does quite well. Like most other Scandinavian
nations, it did not suffer much at all during the 2008-2009 financial crisis.
It has resisted contagion from the Eurozone debt crisis as well, despite being
a member state (although it does not use the euro).
I do not advocate that we make an immediate switch
to this model. That would cause a great shock to our economy, and would be met
with swift unbearable resistance. I do not even suggest we have to go that far;
comparable first world economies have reached significantly more equal
societies with lower tax rates than the country with the highest single rates
on the planet. Switzerland manages to pull off a healthy welfare state while
allowing its citizens to pay the lowest tax rate in Europe. And while
everything isn't
as great as it used to be, Switzerland does prove that we don’t have to
change our tax rates quite so radically. Nor do we have to raise public
spending to the levels of France, which spends more on each person than any
other country in Europe (outside Sweden, of course). As long as we exist in a
capitalist market, we cannot risk immediately changing ourselves and scaring
off chances of private investment. Our government simply doesn't have the
finances or the political will to fill that hole with public investment
entirely.
I advocate we bring our public spending up to the OECD
average (p. 5) of 43.6% through taxation. And while it took an annoying
amount of calculations, I think I've found the most agreeable ways we can do
this. In the first more radical option, individual income tax rates on those
making $250,000 a per annum would be raised to about 45%, with the capital
gains tax rate being raised to 35%. Because I saw this change as somewhat harsh
to swallow, I came up with a secondary option; raising the top income rate to
about 40% and the capital gains rate to about 33%, while raising taxes on
incomes for most middle class families (those making between $90,000-$250,000
per year) by 1.5%. I realize that sounds like financial suicide, but it is the
more moderate (and likely to pass Congressional approval) option of the two. In
both cases, none of the current tax loopholes are changed; doing so would
likely make this much easier on the common taxpayer. If we were to cut the
subsidies to large oil companies which top $52 billion per year, I’m
certain those rate increases wouldn't be nearly as large, especially if we cut
other loopholes which get abused easily.
We should then ensure that our newly increased
public spending does not go to waste. If we put that increase in spending all
towards defense, we will not feel any of the effects of our taxes and the
heightened taxation will become justifiably unpopular. To be specific, with new
tax revenue I propose we bring our spending on social protection to between
35%-40% of our total budget. We should also divert at least some of our defense
spending towards education and general public services. I’m not sure increasing
spending on health here would be intelligent or not, given that we already
spend more on healthcare than pretty much all countries. We should probably
wait for a more efficient healthcare system before we propose greater spending
on it (good thing Obamacare takes effect soon). All this would assuage the high
level of inequality in our country and provide greater opportunities to common
Americans, making our economic model more stable in the present and more
sustainable in the future.
That is all for tonight, and I honestly hope that my
calculations and sources back up my viewpoint here. If you have questions or
comments about this, please feel free to post them right here in the comments
section. Otherwise, my email at zerospintop@live.com
is still open, along with my Facebook, Twitter, DeviantArt, Google+, Steam,
Tumblr, and Reddit accounts. Good night, and this is KnoFear, signing off.
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