Incomes, Not Taxes, are the Real Issue

Every year Tax Day, the income tax-filing deadline in the U.S., brings out the usual assortment of right wing cranks and pleading liberals who agree in principal that capitalism, such as it is, is the greatest economic system among the one that they know of but differ on the issue of the redistribution of income. The right-wingers argue that taxes are misappropriation of private property and liberals agree that the property is indeed private but argue that the role of society’s successful is to throw a few coins in the direction of those less fortunate.

Were it one day to be discovered that society’s successful are successful because the less fortunate are less fortunate the terms of this discussion would stand a chance of being relevant. And no infinite regress is required to get there, just one small step back to the distribution of income. For if the initial distribution of income is debatable, then why not debate the issue there?

America is indeed a capitalist nation if capitalism is a system of connected insiders arranging circumstances for their benefit and to everyone else’s detriment. A quick perusal of Fortune’s (the magazine, not the fate) richest has tech pirates who have misappropriated the labor of others; inheritors of big box retail fortunes built also on stolen labor, if second order by choosing low cost suppliers who have themselves stolen the labor; financial tycoons who have profited from stolen labor (corporate profits) and looted banks; and various other lay-abouts and ne’er do wells who did do well when they chose their parents.

Practically speaking, any discussion of redistribution faces the burden of incomes already having been distributed. The natural question from there is: why was income distributed the way that it was if there was something wrong with it? And if there was nothing wrong with it, why should it be redistributed? This logical sequence leaves liberals begging and right-wingers self-righteously apoplectic. So why not cut to the chase?—the  social struggle is over income distribution before it is about  redistribution.

Without being naïve, Americans will probably need to endure a bit more economic hardship at the hands of their political and economic masters before their plight finally sinks in. Polls suggest that somewhere between 11% and 20 % of the population believes that their incomes and hedge fund tycoon Steve Schwarzman’s are approximately equal (top 1%). Another 20% believe that they will one day earn an income equivalent to Mr. Schwarzman’s. To put this as gently as it can be put, these folks’ incomes are a drop of piss to Mr. Schwarzman’s Atlantic and Pacific Oceans.

One way to understand the specifics is to spend time with income distribution data. Economist Emmanuel Saez of UC Berkeley has a downloadable data set that shows that today’s large incomes come from the combination of corporate executives who have been given the right to pay themselves in money and company stock as they see fit and a runaway financial system that has corrupt insiders also paying themselves as they see fit on threat of setting off the financial doomsday machines that they have spent the last forty years building.

So again, why does it make sense to ask the gentle souls who have come by their fortunes in these ways to part with a bit of it through taxes when all evidence points to the fact that if they gave a crap they wouldn’t have come by their fortunes in these ways in the first place? When Steve Schwarzman (hedge fund tycoon referenced above) complained that being forced to pay a tax rate on his income like it was “ordinary” income was comparable to the Nazi invasion of Poland, a gauntlet was thrown down.

As income distribution data is relatively common and easy to find, information alone will obviously not be the singular force of change. Another, possibly more constructive, way of moving this conversation forward (a euphemism, possibly for a guillotine) is to reframe the issues so that clarity abounds. Were we, the people, to simply not go along by having a national general strike on May 1st, 2012 to shut down key infrastructure then possibly the idea might begin to occur that rich folk aren’t islands. Were the strike to continue until the idea has been firmly planted, that would be even better.

The annual parade of screamers and beggars on Tax Day should end. Discussions of taxes mis-locate the points of contention. Misinformation about income distribution—who it goes to, where it comes from, and in what amounts, is the currency of this misguided debate. Action for social justice should focus attention where it belongs. Occupy Wall Street and a coalition of unions and immigrant rights groups have called for a national General Strike on May 1st, 2012 to bring attention to social justice issues including income inequality. It probably won’t be an end, but it will definitely be a beginning.

Rob Urie is an artist and political economist in New York.

Rob Urie is an artist and political economist. His book Zen Economics is published by CounterPunch Books.

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