The Super Rich are Different …They Don’t Pay Taxes

F. Scott Fitzgerald once penned: “Let me tell you about the very rich. They are different from you and me.” They certainly are.  They do not pay taxes.  At least this is the conclusion of a recent study by ProPublica.  What their study confirms are two points:  The rich operate by a different set of rules in the US, and that when one gets down to the basics, it is still all about class.

The ProPublica obtained secret IRS files examining tax filings by the superrich.  These are the Michael Bloombergs, Jeff Bezos, Warren Buffets, and Elon Musks of the world. Many of them are heroes to liberals, donors to progressive causes, or simply favorites of those who hate Republicans and Donald Trump.  These uber-billionaires talk a great game when it comes to reproductive rights, guns, GLBT issues, or space exploration, but when it comes down to what matters most—money, taxes, and class, they are certainly very different from the rest of us.

While the middle and upper class pay up to 37% of the income in taxes, these individuals often pay barely 1%.  No, they are not tax cheaters as perhaps Donald Trump may allegedly be and perhaps indicted for in New York.  Cheating is crude and for the unsophisticated.  Instead, legally using the tax code loopholes, permissible loans and transfers, they can escape more than minimal tax requirements.  Even as they prefer to pass on, the estate taxes will not get them.   For the superrich, while death is certain, taxes are not.

Class prevails over all other interests for these individuals.  Bloomberg may hate Trump, but they share class interests.  The same for Mark Zuckerberg, Tim Cook, George Soros, and Tom Steyer.  They may all talk a good game, give to the right charities, or even say they should pay more in taxes.  But the reality is they do not, and we should stop thinking of them as being on the side of average Americans.

The ProPublica highlights the ugly not-so-secret of American politics of which we are in denial.  Classes do exist and there is class conflict and warfare, except only one side is winning and that is the rich.  For most people, and often for much of American history, the reality of class takes second stage.  The brilliance of American politics is how the political system that James Madison and company designed recognized the reality of class, as he describes the chief cause of quarrel over unequal divisions of property in Federalist Paper number 10, but then creates a political system that divides us by interests to mediate that reality.  American politics is more often defined by how race, gender, region, religion, and even generations serve as conflict points.  We divide ourselves often by sideshows, failing to realize that while racism, sexism and homophobia are real too, standing behind the sting of each is the potency of class and economic interests.  Take away the ability of white supremacists to enforce their prejudice with economic sanctions and what is left is not much.

There was a point when class was a central issue. This was the late nineteenth and early twentieth centuries when the Old Left teamed up with labor unions to make economic demands.  Part of the narrowing of the gap between the rich and poor occurred because the working class pushed for economic policies to address labor conditions and expand the welfare state.

The rich did not like it.  They attacked the unions and in the 1970s corporate America stepped up to the plate and began spending huge amounts of money to lobby.  But even better for the rich, the left and the working class turned on themselves.  The Old Left was replaced by the New Left which eventually morphed into a politics that simply ignored class.   The New Left was Bill Clinton, Barack Obama, Hillary Clinton, and now Joe Biden neo-liberalism.  It is superficial symbolic politics, but  in many cases, especially with the Clintons and Obama,  it did little to address the economic needs of the poor.    What counts today for progressive or left politics is that of the affluent college-educated, the petite bourgeoisie who have the luxury of ignoring class.

What the ProPublica study should tell us is that there is a need for a New “Old Left.”    Class needs to be seen as standing behind all forms of repression in our society, including police brutality, racism, and sexism,  and that unless it is addressed the others will not be defeated.

David Schultz is a professor of political science at Hamline University. He is the author of Presidential Swing States:  Why Only Ten Matter.