Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Keep CounterPunch ad free. Support our annual fund drive today!

The Crisis on Withering Heights


Where is the revenue coming from to help reduce the tidal waves of red ink during the massive deficit spending by Washington to bolster Wall Street greed, stimulate the economy and rescue homeowners?

The scale of federal deficit is witnessed by the new frequency with which the dollar word “trillions” is used in the news media. An adjustment of major proportions is needed. It was only ten years ago when economists projected out the Clinton?s budgetary surpluses as “as far as the eye can see.” They were scurrying to figure out how this surprising surplus was going to affect the U.S. Treasury bond market. How quaint!

So, who is going to have to pay more into the Treasury? Not the oil and gas industry whose advertised protests against removing unjustified tax breaks are saturating the radio and television stations. Not the real estate or defense industries. Certainly not the financial industry.

How about the very wealthy? Well Barack Obama is letting George W. “red-ink” Bush?s tax cuts expire. So people earning over $250,000 a year will pay more. Mr. Obama plans to give 95% of the taxpayers some tax relief. Granted the Federal Reserve is printing money big time now, in order to spend it fast.

The right-wing, commercially-funded Think-Tank establishment wants tax cuts across the board. And the Cato Institute’s fellows are also defending foreign tax havens! But most corporatists still want an even bigger military budget which already devours fifty percent of the entire federal government?s discretionary budget. Their faith is that future economic growth will dissipate deficits whose purpose ironically is to promote growth

On Capitol Hill?better described as Withering Heights during the past decade?there is little interest or fortitude to confront the revenue question. Who or what can you tax more to make a difference on the massive deficits?

For starters, close the “tax gap” which is defined as the difference between taxes owed and taxes actually paid. This amount is estimated to be $290 billion every year by the IRS. Several thousand more IRS tax collectors will pay for themselves many times over and help preserve some public sense of fairness by those Americans who regularly do pay their taxes.

This figure of $290 billion does not include the huge tax shelters and offshore tax havens harboring trillions of dollars from U.S. corporations and very wealthy Americans who do not wish to share onshore tax responsibilities. Some members of Congress, notably Senator Byron Dorgan, want legislation to bring back some revenues from these tax escapees.

Another huge source of revenue, with very little if any fallout on the average taxpayer, would be a Wall Street sales tax on speculative derivatives (not stocks or bonds). With an estimated $500 trillion traded in such bets on bets or bets on debts last year, a 1/10th of 1% sales tax could bring in $500 billion yearly.

Consumers pay sales taxes in most states of 5 to 7 percent on necessities, while Wall Street?s casino gamblers buy trillions of dollars in derivatives and pay no sales tax. Unfair! Also such a transaction tax will help tamp down wild and destabilizing speculation, which has already pushed our economy to its knees.

A carbon tax would be another important source of revenue to keep the deficit lower and provide incentives to shift faster to energy efficiency and renewable energy such as various kinds of solar and geothermal.

There are other activities that our society as a whole would rather see diminished that can be subjected to increasing taxes. These could include the addictive and gambling industries and anti-social behavior such as corporate crime and fraud. Note that companies do not hesitate imposing “penalties” on consumers for far lesser infractions of their private, one-sided, fine print credit card and other form contracts.

Of course another $300 billion could come to the Treasury if Congress just restored the tax rates on corporate profits that were paid in the relatively prosperous nineteen sixties.

Then there is the reasonable argument that if taxes on “unearned income” — that is dividends and capital gains on investments?should never be lower than the tax on “earned income” by human labor. Well, today, taxes on the former — capital gains and dividends?can be half the rate as income taxes on work. Bringing them closer together could raise more revenue or bring down worker taxes in the process.

With huge deficits coming on like fiscal tornados for future repayment, Congress and President Obama have to face the music and stop dodging the question as to when they are going to be paid for and by whom?

Otherwise bankrupt corporate capitalism may be on its way to bankrupting its savior: Washington socialism!

RALPH NADER is a consumer advocate and three-time presidential candidate.


Ralph Nader is a consumer advocate, lawyer and author of Only the Super-Rich Can Save Us! 

More articles by:

2016 Fund Drive
Smart. Fierce. Uncompromised. Support CounterPunch Now!

  • cp-store
  • donate paypal

CounterPunch Magazine


Weekend Edition
October 21, 2016
Friday - Sunday
John Wight
Hillary Clinton and the Brutal Murder of Gaddafi
Diana Johnstone
Hillary Clinton’s Strategic Ambition in a Nutshell
Jeffrey St. Clair
Roaming Charges: Trump’s Naked and Hillary’s Dead
John W. Whitehead
American Psycho: Sex, Lies and Politics Add Up to a Terrifying Election Season
Stephen Cooper
Hell on Earth in Alabama: Inside Holman Prison
Patrick Cockburn
13 Years of War: Mosul’s Frightening and Uncertain Future
Rob Urie
Name the Dangerous Candidate
Pepe Escobar
The Aleppo / Mosul Riddle
David Rosen
The War on Drugs is a Racket
Sami Siegelbaum
Once More, the Value of the Humanities
Cathy Breen
“Today Is One of the Heaviest Days of My Life”
Neve Gordon
Israel’s Boycott Hypocrisy
Mark Hand
Of Pipelines and Protest Pens: When the Press Loses Its Shield
Victor Wallis
On the Stealing of U.S. Elections
Michael Hudson
The Return of the Repressed Critique of Rentiers: Veblen in the 21st century Rentier Capitalism
Brian Cloughley
Drumbeats of Anti-Russia Confrontation From Washington to London
Howard Lisnoff
Still Licking Our Wounds and Hoping for Change
Brian Gruber
Iraq: There Is No State
Peter Lee
Trump: We Wish the Problem Was Fascism
Stanley L. Cohen
Equality and Justice for All, It Seems, But Palestinians
Steve Early
In Bay Area Refinery Town: Berniecrats & Clintonites Clash Over Rent Control
Kristine Mattis
All Solutions are Inadequate: Why It Doesn’t Matter If Politicians Mention Climate Change
Peter Linebaugh
Ron Suny and the Marxist Commune: a Note
Andre Vltchek
Sudan, Africa and the Mosaic of Horrors
Keith Binkly
The Russians Have Been Hacking Us For Years, Why Is It a Crisis Now?
Jonathan Cook
Adam Curtis: Another Manager of Perceptions
Ted Dace
The Fall
Sheldon Richman
Come and See the Anarchy Inherent in the System
Susana Hurlich
Hurricane Matthew: an Overview of the Damages in Cuba
Dave Lindorff
Screwing With and Screwing the Elderly and Disabled
Chandra Muzaffar
Cuba: Rejecting Sanctions, Sending a Message
Dennis Kucinich
War or Peace?
Joseph Natoli
Seething Anger in the Post-2016 Election Season
Jack Rasmus
Behind The 3rd US Presidential Debate—What’s Coming in 2017
Ron Jacobs
A Theory of Despair?
Gilbert Mercier
Globalist Clinton: Clear and Present Danger to World Peace
James A Haught
Many Struggles Won Religious Freedom
Kollibri terre Sonnenblume
Dear Fellow Gen Xers: Let’s Step Aside for the Millennials
Uri Avnery
The Peres Funeral Ruckus
Tom Clifford
Duterte’s Gambit: the Philippines’s Pivot to China
Reyes Mata III
Scaling Camelot’s Walls: an Essay Regarding Donald Trump
Raouf Halaby
Away from the Fray: From Election Frenzy to an Interlude in Paradise
James McEnteer
Art of the Feel
David Yearsley
Trump and Hitchcock in the Age of Conspiracies
Charles R. Larson
Review: Sjón’s “Moonstone: the Boy Who Never Was”