The Republic of T.

Black. Gay. Father. Vegetarian. Buddhist. Liberal.

The GOP Tax Plan Does So Stink

No doubt Republicans know the fight over extending the payroll tax is one they could lose. Thus, they’ve pivoted away from opposing the extension, and have presented a plan of their own — one that Timothy Noah says the Democrats should be willing to work with because it “doesn’t stink.”

Well, in my experience, just because you can’t smell something doesn’t mean it doesn’t sink. Some things “pass the smell test” because of a faulty sniffer; not because they don’t stink. And the GOP’s payroll tax plan does so stink.

Not least of all, because this far into the recession, we’re even having to debate putting money into the hands of middle- and working-class Americans who will spend it, thus putting it back into the economy, instead of shoveling even more of it at wealthy 1 percenters who don’t spend it and don’t create jobs with it.

Noah breaks down the GOP plan in to five parts, and offers his take on each of them. I’m sure other people will address his various points, but I want to take a moment to address the fourth one, which Noah dismisses almost flippantly.

4. Allow millionaires and billionaires to voluntarily contribute to deficit reduction. This is a juvenile dig at Warren Buffett, but sure, whatever.

One of the things that stinks about the GOP plan is this idea that the government should operate like a charity, begging for alms from the one percent. How Oliver Twist can you get? What’s next? Telethons broadcast from Capitol Hill? Pledge breaks during the State of the Union address?

It’s an idea that even some millionaires find laughable.

The self-described Patriotic Millionaires who want the government to close its budget gaps with higher taxes on the rich think it’s ridiculous to expect wealthy people to just “tax themselves” and donate their extra money to the government.

The idea that people are just going to send in $1 million or $500,000 or $5 million or something to reduce the national debt is just preposterous on its face,” Dennis Mehiel, the founder and chairman of cardboard box manufacturer U.S. Corrugated, said on a conference call with other millionaires this week.

… Paul Egerman, founder of a medical transcription company called eScription, also scoffed at the suggestion millionaires who advocate for higher taxes should take it upon themselves to send money to the government.

Running any government is a shared responsibility of its citizens,” Egerman said. “Government is not a charity, and you can’t imagine a situation where the Department of Defense runs a bake sale to build an aircraft carrier.”

It’s hard to put it more plainly than that. Government is a shared responsibility of its citizens. That’s what makes it our government, and not “the government.” If real shared sacrifice is practically a joke in Washington, shared responsibility almost entirely unheard of. But that’s what it boils down to; shared responsibility, and the concept that the wealthy have a responsibility to contribute because they have benefited from everything that our government does with the support of our taxes.

The Patriotic Millionaires spelled it out in their letter to President Obama, Harry Reid and John Boehner.

Our country faces a choice – we can pay our debts and build for the future, or we can shirk our financial responsibilities and cripple our nation’s potential.

Our country has been good to us. It provided a foundation through which we could succeed. Now, we want to do our part to keep that foundation strong so that others can succeed as we have.

It’s an answer to the question President Obama posed when he presented his American Jobs Act to congress.

Should we keep tax loopholes for oil companies? Or should we use that money to give small business owners a tax credit when they hire new workers? Because we can’t afford to do both. Should we keep tax breaks for millionaires and billionaires? Or should we put teachers back to work so our kids can graduate ready for college and good jobs? Right now, we can’t afford to do both.

This isn’t political grandstanding. This isn’t class warfare. This is simple math.These are real choices that we have to make. And I’m pretty sure I know what most Americans would choose. It’s not even close. And it’s time for us to do what’s right for our future.

That’s why this is more than a juvenile dig. Much more. It goes deeper than that. Much deeper. It’s a partial summation of a conservative philosophy of government. It’s not just a dig at Warren Buffet. It’s another conservative attack on the social contract.

That fourth item is just more validation of the GOP line that “Those who contribute the most to government should benefit the most from it, and those who get the most from government should contribute more to it,” which they use to justify raising taxes on the poor, the working-class and the middle-class, while fighting tooth and nail to defend tax loopholes that mostly benefit the wealthy.

That’s why they’re willing to raise taxes on 113 million working- and middle-class households to spare 345,000 millionaires a surtax so tiny it would amount to 1/50th of their income. It’s not even a vote for the 1 percent over the 99 percent. It’s a vote for the 0.2 percent, that would cost us about 400,000 jobs.

That’s why the $30 million a year the government spends in welfare for those who earn $1 million or more a year never gets mentioned. It’s why the tax expenditures for the wealthy — which cost more than what we spend on defense, Social Security, Medicare, Medicaid and all the other non-defense discretionary programs is never addressed, and is thus sacrosanct while all the other programs above are targeted for cuts.

It all boils down to the Randian notion that the one percent contribute the most to the real wealth of society, while the other 99 contributes nothing and merely “leeches” off the mythically “self-made” one percent. But they’re the ones who’ve been getting a free ride for the last decade or so, at great cost to the other 99 percent of us. The one percent is largely made up of Wall Streeters, hedge fund mangers and other financial sector types — who arguably create nothing of social value, but have instead destroyed more wealth than they’ve created, and caused more misery in a quest to suck even more out of the rest of us.

Elizabeth Warren already delivered the takedown for this.

In a video of a recent Warren appearance, posted online by an individual who says he or she is not affiliated with the campaign, Warren answered the charge. “I hear all this, you know, ‘Well, this is class warfare, this is whatever,’” Warren said. “No. There is nobody in this country who got rich on his own — nobody.

“You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police-forces and fire-forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory — and hire someone to protect against this — because of the work the rest of us did.

“Now look, you built a factory and it turned into something terrific, or a great idea. God bless — keep a big hunk of it. But part of the underlying social contract is, you take a hunk of that and pay forward for the next kid who comes along.”

Even Adam Smith and Abraham Lincoln understood that basic concept.

Well, this drew responses the right by everyone from Paul Ryan to George Will and (of course) the Massachusetts Republican Party. The GOP demanded that Harvard dump Warren. Her opponent, Scott Brown, resorted to low blows about Warren’s physique. Some right-wing bloggers reached for their revolvers.

Turns out, they’d have been better off reaching for their bookshelves instead of their gunracks. There they would find their dog-eared copies of Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations in which, Truthout’s Brian T. Thorn notes, the father of “the invisible hand” wrote the crib notes for Elizabeth Warren’s stump speech.

Yes, that Adam Smith – beloved by laissez-faire capitalists for his economic metaphor, the invisible hand. From his 1776 work “An Inquiry Into the Nature and Causes of the Wealth of Nations”:

Adam Smith

“The woolen-coat, for example … is the produce of the joint labor of a great multitude of workmen. The shepherd, the sorter of the wool, the wool-comber or carder, the dyer, the scribbler, the spinner, the weaver, the fuller, the dresser, with many others, must all join their different arts in order to complete even this homely production. How many merchants and carriers, besides, must have been employed in transporting the materials from some of those workmen to others who often live in a very distant part of the country! How much commerce and navigation in particular, how many ship-builders, sailors, sail-makers, rope-makers, must have been employed in order to bring together the different drugs made use of by the dyer, which often come from the remotest corners of the world!“(1)

There is a clear connection between the two passages. Both explain the cooperation required of businesses to build and sustain a functioning economy, cooperation with both government and workers. Both explain the importance of economic community.

…You might assume that a party that once upon a time called itself “The Party of Lincoln” would as honest as old Abe was about wealth and labor.

Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.

You’d be wrong.

Even Ayn Rand herself would probably get it.

In effect, an important aspect of Rand’s philosophy supports the central tenet of a functioning capitalist economy: Those who create the greatest societal wealth should be the most highly compensated.

…From this perspective, Rand’s philosophy points out that real capitalism is no longer enforced in America; not because of welfare programs, taxes, the social safety net, or government regulations, but for a very different reason: The highest paid people in America today create no real wealth for the society.

The financial industry, comprised of traders, hedge funds who exploit arbitrage opportunities, and “quants” who develop mathematical models to take advantage of minute inefficiencies in trading markets (for stocks, derivative securities of all types, commodities, and more) are now earning seemingly inestimable sums. Hedge fund owners earn billions of dollars annually while traders who earn less than several million dollars a year are not, by Wall Street standards, real successes. Yet they are all gambling in “a heads I win, tails you lose” game. The outcome of all their efforts are high profits, but little, if any, new societal wealth.

Real societal wealth is anything that enhances the lives of those in our society, starting with basics such as food, shelter and medicine, but also including almost any property a person can own or anything a person can experience, such as entertainment or greater convenience. Real wealth can be eaten, used, shared. or experienced.

… Here’s a final thought: In Rand’s Atlas Shrugged, the industrialists who create the real wealth of the society start to disappear as they go into hiding. The trains that make the society work, both literally and metaphorically, stop.

So I have developed what we can call the Ayn Rand test of value: If securities traders and quants at investment firms and hedge funds started to disappear in large numbers tomorrow, would the trains that comprise our economy and society run better or worse?

Conservatives believe that the 99 percent owes the 1 percent. But the reality is that the 1 percent wouldn’t have its wealth without the benefit of the social contract that the rest of us support.

What’s needed from them is not a “donation.” It’s payment due.

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