Tax Cuts for the Rich Only Benefit the Economy of the Rich

A majority of the U.S. citizens get zero political representation for the taxes they pay. Of the 49 percent of the population that does vote in the general elections (with the advisory that as low as 20-25 percent may vote in mid-term elections, and less in local elections), another significant majority is barely remotely, and in highly mediated form, represented. Time allowing, of course; the Senators’ and Representatives’ time is excruciatingly precious and by necessity only a significantly small minority of it shall be spent with lesser voters.

Only a minority of the total population has any real political representation, and of that minority a tiny segment, as we all know, owns the politicians.

One would be amiss to suggest that we cannot build a movement around the very slogan that drove the American colonies to revolt and kick out the British overlords; that slogan being: No Taxation without Representation. So, let us call them on this. Let us serve them what they once dished out.

For out times, though, we reverse the formula and demand: Direct Representation for Taxation!

The current taxation system assumes people are imbeciles. We declare that people know very well how they want their money spent!

Let us start with a basic question: Who pays the taxes and who takes the cake?

While the percentages of taxes paid by the rich have been shrinking progressively over the decades, the amount extracted out of the majority of the population (the non-rich) has been kept pretty steady since the 1940s; the non-rich have always paid most of the taxes.

In newspaper articles published back in 2004, it was reported that: “[A Government Accounting Office] report showed that 61 percent of US corporations paid no federal income taxes from 1996 through 2000, a period of rapid economic growth and rising corporate profits,” (Boston Globe, April 11, 2004; emphasis added).

In the same article: “The percentage of federal tax collections paid by corporations has tumbled from a high of 39.8 percent in 1943 to a low of 7.4 percent last year [2003] But since World War II, the share paid by individual income tax filers has remained relatively stable, bouncing between 40 percent and 50 percent.”

In short, individuals like you and me have been paying the same amount of taxes steadily (i.e. most of the taxes), but those most able to pay have been getting non-stop tax breaks, and most, whenever they can, pay none.

Another basic question: What happens to our taxes? These days, taxes are spent mostly on tax cuts for the rich, on prisons, imperialist covert designs and open wars.

As reported in a December 11, 2005 New York Times article, “The price tag for protection against a Category 5 hurricane [for New Orleans], which would involve not just stronger and higher levees but also new drainage canals and environmental restoration, would very likely run to well over $32 billion That starting point represents just 1.2 percent of this year’s estimated $2.6 trillion in federal spending, which actually overstates the case, since the cost would be spread over many years. And it is barely one-third the cost of the $95 billion in tax cuts passed just last week by the House of Representatives.” To put it in another frame, the $32 billion cost to rebuild New Orleans’ levees equals roughly the money spent in a 16-week period to rape and pillage Iraq.

The rebuilding of New Orleans’ levees is merely one example among hundreds of cases where our taxes are expropriated, without any of us having any say over the criteria for spending it. There are colossal misappropriations as pertains to healthcare, education, infrastructural needs of all kinds, not to mention the environmental cleanups needed in cities across the U.S., and investment in local communities.

Has the reduction of taxes for these corporations, sixty percent of whom, again, may pay no taxes, created a better economy? Not by a long shot. More than 45 million U.S. citizens and millions of undocumented immigrants have no access to any healthcare. More than two million citizens are in prisons. More than 12 million families go hungry. Close to 18 percent of children under-18 live in poverty.

Adjusted against the real buying power of the dollar in 2006, the minimum wages for workers back in 1968 were $9.27 an hour, the highest ever since. With the new legislation passed in January of this year, minimum wages are to stand at $5.85 an hour now (and ‘raised’ to $7.25 by 2009). Meaning, today’s minimum wages get you 40 percent less stuff than it did nearly forty years ago!

In other words, the tax cuts for the rich have been good only for the economy of the rich people, and disastrous for the economy of the rest of us.

A modest proposal

In the 2006 Congressional elections, people of the United States, outraged at the direction of the foreign policy dictated supposedly merely by the Republicans occupying two of the three branches of the government, expressed their outrage by giving the Democrats a majority in both houses of the Congress, in the vain hope that things may change. What was the result? No change at all in the direction of the foreign policy, as relates to the wars in Iraq and Afghanistan.

Let us look at an alternative situation. What if, instead of the Congressional representatives, the people themselves had the power of the purse? If such a mechanism existed, those millions of U.S. citizens who are sick and tired of the lies told them by the politicians could have used that mechanism long before the 2006 Congressional elections to start cutting off the funding for the war.

This, of course, would not have stopped those who do support the war party from continuing to fund the pillaging and the raping of Iraq. However, with direct representation for taxation the anti-war party too would have been represented in the collective decision making process. As the political situation stands now, even when the people do vote anti-war, for example, their wishes are completely ignored; except when those wishes are taken into account for rhetorical fine-tuning to create a semblance that the people’s voices have been heard and people should just relax and leave everything to the politicians.

In a previous article, I suggested a re-conceptualization of the taxation system, proposing the following:

“We can demand a new system of taxation to be instituted, whereby every year, as people file their taxes they also file a ‘Priority List’, submitting to the government their instructions for spending their money. In other words, at the same time as they hand over their money they dictate to the government the order of priorities for the expenditure of their money. So, for example, when I hand over my money to the IRS, I likewise hand over my instructions to the effect that of the taxes I have paid, the government must spend 25% of it on education for immigrants who are not documented; 25% on the health of the same population; 20% on environmental clean up efforts in poor neighborhoods and towns; 10% on infrastructure building in poor neighborhoods and towns; 10% on research into diseases; and 10% on the proliferation of artistic activities among the children in all neighborhoods. Individuals can choose any number of priorities, and rank them in any percentage they deem necessary. If individuals so wished, they could even give any desirable percentage of their taxes to the victims of imperialism,” (Taxation or Racketeering, Online Journal, September17, 2005).

Those wishing to transfer fiscal decision-making powers to their Congressional representatives may do so. However, those who are more vigilant and wish to exercise a more intelligent form of political power by controlling how their money is spent may also wield their political power, and have a say in the political running of things.

What would be some of the consequences of such a system? First and foremost, we would transform the legislative representatives from masters they assume themselves to be, dictating to us how our money should be spent, to the public servants that they, theoretically, are supposed to be.

Second, such a system creates an electorate who is more involved, hence more intelligent, since more empowered to decide on questions regarding the expenditure of their taxes.

Third, such a system of taxation reflects more truthfully the collective and aggregate will of the people, and is a first step toward direct democracy; a system which is possible and, given our state of statistical sciences as well as technological capabilities, can be practically implemented.

Fourth, there will be an end to the fatalistic mentality encouraged by the ruling classes, who love to say, ‘There is no alternative!’ With the re-conceptualized taxation proposed above, people will have an actual mechanism to express their outrage and set things right, according to their own judgment and understanding as well as their ethics and morality. When, for example, people realize that they have been lied to and cheated in order send their sons and daughters as well as their money to start a war against an innocent population just so as to loot their resources, they can immediately stop their taxes from being used to fund such murderous projects. In short, there will be an end to “There Is No Alternative” mentality. People can indeed start to institute another world that is possible.

Plague on both their houses!

Next year we will see yet another round of buffoonery showcased by the Democrats who, in spite of the fact that they have been funding the sadistic aggression against the peoples of Iraq and Afghanistan, not to forget the support for total and unconditional subjugation of the Palestinian people; in spite of all that, they will no doubt come out accusing the Republicans of lying to the people and ‘mishandling’ the ‘war on terror’, positioning themselves as better managers for the same policies as are pursued by the current administration.

The choice facing the true left is clear. The Left (with capital L) in the US, if it means business beyond remaining reactive forever, needs to create a unified, pluralistic, de-centralized political party for social justice that can present a realistic alternative to the business as usual. Such a party, I would argue modestly, can realistically present the idea of ‘Direct Representation for Taxation’, as a plank of its much larger platform.

Further, a party of the left that does mean business can become a mass party. The fact that more than half of the electorate does not vote is not a sign of their apathy but a sign of their intelligence, seeing the lie for what it is, and knowing that the ruling parties do not represent the interests of the people. So, let’s connect!

The question of taxation is one that every man and woman can relate to. The current taxation system is the equivalent of a shopping situation, in which the shopkeeper demanded and got whatever he thought he could get out of you, and in exchange gave whatever he cared to give you!

The move for a tax reform for direct representation can start at the ballot-initiative level, state by state, building at the grassroots; a grassroots that can slowly, yet with a growing and realistic confidence, demand a new taxation as a practical necessity; this can in turn transform the way political power is wielded: dispersed yet more representative.

This re-conceptualization of taxation can unite single-issue activists and organizations with those who aim for deep-structural, socio-economic change, as well as libertarians from both ends of the spectrum.

We need to change the terms of the debate. In this spirit, we can face the Establishment with a real challenge for real reform. Posed the right way, a platform based on taxation reform re-casts politics in a light that is avoided by all corrupt politicians and their direct or adjacent allies and lackeys in the media and the academia, since it brings back the economic dimension into the most political of all questions; the question of who decides where my money goes, after it’s collected in the form of taxes.

REZA FIYOUZAT can be reached at:



Reza Fiyouzat may be contacted at: