It’s Tax Time Again!

Random Grumbles and Philosophy

William Sundwick

Do you believe that all taxes are theft? Or, do you simply fear you may not be able to correctly determine how much you owe the IRS, because your income taxes have become so complex? Maybe you object to certain elements of the tax code, to bloated defense budgets, or too much entitlement?

Whatever the excuse, many people seem to enjoy grumbling about their taxes. They may feel, in their heart, that all taxation is theft – that they deserve to keep their hard-earned money for themselves. But, when pressed, unless well-lubricated, few admit to those feelings. They know on some level that there is a social contract requiring shared responsibility for maintenance of civilized society.

In the United States, there is a growing divide between those who consider themselves wealthy and those who do not. In fact, growing inequality is an issue worldwide, not just in our country. This can be confirmed with economic statistics. It is not just a matter of self-perception. But, self-perception may be the dominant factor in how much we grumble about paying taxes.

People generally resent paying taxes to support those they consider better off than them, or as Arlie Hochschild writes, “cutting ahead of them in line.” Taxation must be sold as something which benefits ALL taxpayers. Progressive tax schedules are supposed to address the issue. But, the question of where the revenue gets spent is unavoidable. Tax “loopholes” are often understood as primarily benefiting those wealthier than us.  But, how many of us really know where we fit in the modern American wealth distribution pie?

Much of the inequality discussion these days tends to divide the country into two groups – the 99% and the 1% (a meme from the Occupy Wall Street movement of 2011 that seems to have stuck). Of course, everybody we know is likely to be in the 99%. If, instead of that extreme division, we talk about the top 10% or 20%, we begin to see the “middle class.”

But, since even a 20-80 division places the vast majority of Americans at something less than upper middle class affluence, good socialists still have much to complain about. I’m doing my 2017 taxes now, and don’t have much hard information about what my 2018 taxes will look like – post “tax reform.” Initial analysis, however, suggests that most of us in the top 20% will get hit (even if not that top 1%). Should we be bitter?

I say no. While some provisions of the act seem to reward economic rent-seeking (like corporate tax cuts going for stock buy backs), and some are motivated by partisan politics (like state and local taxes no longer being deductible), the basic structure of the tax code is still progressive. The wealthy pay more. But, if you think you are footing the bill for those who are not wealthy to get a “free ride,” you’d be wrong. People who know they are rich usually understand wealth distribution. People who don’t realize they are not rich often object most to taxes, even though they pay little as is. They are driven more by social animus than economic hardship.

This leads us to the wonderful “democracy” we live in, and its small clique of elected officials. Congress and state legislatures are forever trying to appease their supporters – especially their financial supporters. They continuously introduce incentives for certain business activity to benefit their specific “constituents,” via the tax code. There are also the organized pressure groups (they are “constituents” as well) who may demand changes in the tax code to punish certain behavior – these take the form of “sin taxes,” usually regressive sales or excise taxes. Should we resent this feature of democratic government?

Again, I say no. Democracy has a price tag. If there is to be any forward movement in the body politic, somebody must pay for it. The political sphere is, indeed, composed of constituent groups. But, there are alternate ways of organizing power, besides money. Organizations that seek to leverage power can set themselves up as charitable entities, allowing financial supporters to claim a tax deduction – for example, the ACLU Foundation, or Southern Poverty Law Center.

Does all this push and pull in the tax code contribute to making tax time just too darn hard to figure out? Thanks to the wonders of TurboTax, I can say no to this complaint, as well. Intuit keeps refining their product every year. For 2017, it looks to me like even my more complicated tax year is easily handled by the software’s interview format. It feels like a conversation with a friend, or mentor. I can’t believe that years ago I paid a tax accountant to do my taxes! I think many a tax preparer must have been put out of work by the Internet, especially by Intuit, with TurboTax and Quicken.

We’ll see what 2018 brings. I’m resigned to not being able to deduct advance payments for property tax assessment – I made a good try, immediately after the tax bill was signed on Dec. 22. But, so long as my mortgage lender gives me credit for having paid a portion of my 2018 taxes, I guess I won’t complain too much. After all, I have chosen to live in one of those high tax blue states.

Are taxes really that painful, then? The answer seems to lie deep in your orientation to society, and what role you believe governments should play in it. And, perhaps there is a secondary factor for you – have you kept all your tax records for the previous year, in a well-organized fashion? Even TurboTax can’t divine figures from documents that don’t exist.

Thanks to some big capital gains, I need to pay estimated taxes for next year – but, even that process is facilitated by TurboTax. (This is exciting, I’ve never had this situation in the modern Internet era!)

It always feels good when I file my return – another milestone measuring what I’ve accomplished in the past year. It ought to feel even better when I owe money to the IRS at year’s end, rather than getting a refund. But, perhaps that’s a bridge too far.

Lessons of GA06: Dems still need better candidates ... and, grass roots support just isn't enough!

Making of a Lefty

Populism Isn’t Only for the Right

William Sundwick

Things have changed in American politics over the last hundred years. In 1917, there was a Democratic Party that had embraced the soul of the Progressive Era (started by Republicans), seemingly dedicated to a “Fair Deal” for working men (and some women, mostly in the garment industry). There was a peace between the Democratic Party and capitalism based on capital’s earnest desire for labor. The coming war in Europe would further constrict the supply of labor. Big industrial employers were competing for workers – they were eager to accommodate the Left, at least that part of it that didn’t threaten their survival.

In 2017, however, we are looking at low growth in the short term … greater productivity of workers, for sure, but no labor shortage on the horizon. Both technology and immigration are reducing demand for American workers. And, with these economic changes, the political power of organized labor has dwindled to virtually nil.

Initially, the Bolshevik Revolution of 1917, and its wave effect throughout the industrialized world, struck fear into the hearts of capitalists everywhere. They felt weak and vulnerable, and began to shore up their defenses. In the U.S., they invented an ideology: “The American Way” … it didn’t include any security for most industrial workers, and people of color were still excluded. But, we were “free,” they said. The Frontier, Horatio Alger and self-reliance, were heroic. Generations were indoctrinated accordingly.

The Left took a big hit. The Cold War didn’t help, when it seemed like the world was divided between two giant superpowers facing off – one “Communist” and one “Free.”

Saving Capitalism

There was an interruption to this story in the thirties and forties – capitalism nearly collapsed worldwide. It was saved by two things: rediscovery of that turn-of-the-century “progressivism,” and total mobilization of the state to fight an existential threat from fascism. The Soviet Union beat us at the latter, as their economy had been mobilized by the state since the Revolution.

In the United States, 1945 showed us that “The American Way” had triumphed … but, what really triumphed? Stalin would say the very same thing to people in his half of the world: “socialism” was triumphant. The Cold War seemed to prove both views correct!

The progressivism of FDR’s New Deal became institutionalized in the U.S. throughout the forties, fifties, sixties, even the seventies with Nixon-Ford-Carter. Both American parties subscribed to the same ideology, despite the still unacceptable public association with the Left (progressives became known as “liberals” in the U.S.).

The Socialist International of the nineteenth century became the basis for democratically elected center-left parties throughout western Europe, and Latin America. The term “liberal” was associated with center-right parties. The Soviet Union grew its own economy, along with its new imperial domain in eastern Europe, although at a somewhat slower pace than the West. By the end of the century, that competition finally got the best of the Soviets. They were ultimately outproduced into oblivion, probably due to structural weaknesses of their overly centralized economy.

But, “victory” in the Cold War did NOT come only because of the free market ideology of the Reagan years. Capitalism won because of those many decades of collaboration between industry and the state. It was the progressive left that saved it. Capital remained privately owned (or, publicly, through shareholders), but was subject to regulation by the state, for the common good. Fascism used a similar economic organization, but its “common good” was defined as furtherance of national interests vs. the rest of the world -- hence, World War II.

Post-Cold War, Dems Fail

By the beginning of the 21^st century, it was becoming increasingly clear that most American working- class people saw less hope in the future than their parents had known in the past century. The Russians hadn’t been their enemy, but powerful forces in their own society were. However, propaganda for the “American Way” intentionally made these forces difficult to identify.

Exceptions to this malaise were now people of color (POC), women, and those fortunate enough to find their way into growing economic sectors (tech), rather than retreating sectors (manufacturing). Everybody else tended to look backward rather than forward – they drifted to the right, politically. The Republican Party seized on this opportunity, since they had a similar group of supporters already (rural and small-town folks). Democrats started losing elections when Republicans portrayed them as the “powerful forces” keeping people down. As Dems were the leading proponents of the meritocracy of the professional class, there was some truth to the charge.

Those groups remaining tied to the Democratic Party thought their current favorable status, vis-à-vis the future, was a direct result of Democratic priorities. They won the presidency in 2008 and 2012, but otherwise were localized in the cosmopolitan urban centers of the coasts (and Chicago) … there were many of them, but they WERE the privileged class in America!

I am one of them, but hopefully I can see that I don’t represent the majority.

The Impoverished

The majority in America are not people like me. They are people who couldn’t afford college, and weren’t eligible for sufficiently debt-free financial aid. They are younger. They struggle. They won’t have many resources to pass on to their children, either. Their skills may well be in dying occupations. They need relief, and mostly it’s Republican politicians who promise it … by favoring their employers, and their communities.

When Democrats attempt the same, they are generally bargaining with capitalism from weakness. In high growth sectors (like tech), they’ve sometimes managed to work with entrepreneurs. But, entrepreneurship tends to breed reaction … from the established money, their competitors in the market. Entrepreneurship is so twenty-five years ago, not so much now. The Citizens United decision of 2010 sealed the fate of any attempts to influence elections with “grass roots” support alone.

Democrats are now left competing for the same big donors that Republicans use. This requires them to cater to capitalist-centric interests, and remain silent on opposing interests – like things that benefit workers. Only the most cynical (or courageous) donors would take a chance on a politician who travels around campaigning on any kind of restrictions, much less any outright attack, on them. Instead, Dems will usually be content to emphasize positions which support their established base, and have no economic consequences for their big donors. They are never allowed to grow that base, they are always on the defensive.

Those “Deplorables”

The 2016 election did something profound. It etched in clear relief who was on which side. That traditional blue-collar workforce (both male and female, but white) voted overwhelmingly for the candidate of the right: Donald Trump. Other parts of the Democratic coalition held, but turnout was lower than for Obama’s two elections. In the end, the “band of deplorables,” as Clinton memorably named them, won.

The Left needs to get them back. As “deplorable” as they seem, it seems to me that an economic message about capitalism may be just the ticket to get their attention in the 21^st century. If enough people can be convinced that they have something in common with the other cultural groups that remain in the Democratic coalition, Dems can start winning again. Since they are in no danger of losing any more of their base, the time is ripe to think about expansion. And, the most promising avenue for this strategy is to “go left.” Here’s why …

1.    Only old people who remember the Cold War have any negative association with socialism (maybe some “Gen X” libertarians, too … but, they can either vote for a third party, or Republicans, they’re not needed for a left coalition).

2.       Given a few more election cycles, the old folks will die out.

3.       White racism, sexism, social conservatism are all expressions of frustration about not knowing how to deal with “the other” … social engineering (via advertising, social media, and entertainment) can easily remedy that, helping people cope with others. Millennials already have this covered. People in large urban areas are better equipped than those in rural areas and small towns – and, they’re more numerous!

4.       The main thing that keeps people from participating in the democratic process is lack of trust in candidates for elected office – there’s a stench of corruption around the whole thing that keeps many from even voting. Openness about financing would go a long way to help this.

The formula for a winning “lefty” candidate, then, would be one who could marshal the hearts and minds of young people struggling economically, but who have never learned to hate any groups competing with them for the crumbs at the bottom of the food chain. The final ingredient would be willingness of the candidate to fully disclose where their money comes from, and why they’re proud to represent those interests! Yes, some big money IS from socially responsible organizations, or individuals. It should not be a handicap to get large donations from George Soros or Donald Sussman.

Barack Obama managed to marshal those young hearts and minds, but faltered on the openness requirement – even though it dogged his party more than him.

So, what’s stopping the Democratic Party from fielding candidates like this? They sometimes do, but a primary challenge of incumbents, or their designated successors, may be required (as in Virginia this month). Primaries can be just as brutal as general elections against Republicans, if not handled adroitly. The incumbents have lots of resources, and loyal networks of people they have helped (or, who think they’ve been helped).

What Is To Be Done?

Message to idealistic young people who want to push “lefty” candidates for office: keep trying, always resist attempts to divide voters along cultural lines (don’t talk about “deplorables”), your political foe is a competitor, not an enemy. And, think about the larger community your candidate seeks to serve – it may be an opportunity to build a new network. Remember, you’re probably luckier than most people in the community – don’t forget that privilege. Share your talents, don’t use them as weapons.

Be like Vera Pavlovna, the main character in the 1863 Chernyshevsky novel, Chto delat’.

Once you’ve committed yourself to social justice (to “the revolution”), and become a genuine “lefty” like me, you need to appreciate that change is a big job … indeed, it will likely take many election cycles, uninterrupted by reaction, with many people working toward the same goals.

Your goals are to reduce wealth inequality, and to be sensitive to various emotional and cultural predispositions in your community. Your tools are organizing, contributing, and steadfastness in your dedication to justice.

Whatever you do, it won’t be enough – even if your candidate prevails, they need to be re-elected to complete their mission. If they fail, another candidate will need to take their place. The candidates themselves are only means to an end.

And, others will be needed to take your place, as well – they will be there when you lose your resolve.