During the recent Republican attempt to repeal and replace Obamacare, which fortunately went down in defeat, there was much talk about the 24 million people who would lose their health insurance if Trumpcare became the law of the land.
There was also talk of how the “savings” realized from removing those 24 million people from the insurance rolls would accrue to the wealthy, in the form of tax cuts.
But, unless I missed it, in all this discussion there was no talk ― none ― coming from the super-rich that such tax cuts were not necessary, were too much of a muchness, were in fact unseemly, given that 24 million people would have lost their insurance, only to benefit the already overflowing coffers of the rich.
Did anybody hear it from the rich: “No more tax cuts for me, thanks, I’m good”? (I didn’t think so.)
Nor did President Trump, putative tribune of the little guy, raise objections that the health care package going forward would hurt the little guy while further enriching the rich guy (“Whoops!”). But by now we know Trump doesn’t always read the documents being passed before him.
What’s especially discouraging: Where was the show of heart among the super-rich ― the heartsick recognition ― -at the prospect of 24 million souls being shoved off the insurance rolls? That image was the perfect prompt to show some of what we’re not seeing among the rich these days: heart. Apparently for the rich, greed and the counting-house trump all else, including the suffering of their fellow Americans.
Granted, the rich are adept at “giving back” in charity drives and galas ― after the fact of accumulating their base wealth working the system to their gross advantage.
That system ― American turbo-capitalism ― has produced the biggest imbalance in income between rich and poor since 1928, the year before the Great Depression hit. “Starting in the mid- to late-1970s,” according to a Pew Research Center report, “the uppermost tier’s income share began rising dramatically, while that of the bottom 90 perccent started to fall.”
About this growing inequality, there has likewise been much talk. But, again, are we hearing cries from the rich that this inequality, and the suffering and insecurity it inflicts on so many, is intolerable, unendurable, cannot be allowed to continue, must be amended? (No.)
Sure, we occasionally hear from investor Warren Buffett, “Oracle of Omaha” and one of the world’s richest people, lamenting how he pays taxes at a lower rate than his secretary. But nothing comes of this lamentation in terms of tax reform that would reduce that inequality. “Redistribution” is anathema to the rich.
There is a term for this type of grasping super-rich: “extractive elites.”
In their book Why Nations Fail, economists Daron Acemoglu and James A. Robinson trace how, in case after tragic case throughout history, extractive elites are the principal reason why great nations decline and fall. Specifically (to quote from my review), those nations fail when, through political control, “an elite extracts the economic assets ― natural or manufactured ― by means of monopoly, coerced labor, expropriation of land, and exemption from taxation.” Likewise Nobel economist Joseph Stiglitz warns of the catastrophic price of income inequality.
With tax reform next on the Trump legislative agenda, the rich will get a do-over―- to compensate for their silence on the healthcare bill. Will one of their number step up to declare, “Enough with all the tax cuts!” and argue for a more equitable tax system? Will the rich meet this test, which at bottom is a moral test? Will the Republicans, their faithful Congressional minions?
(Per recent reports, Trump plans to revisit the health care bill before getting to tax reform, so once again the rich will get to reconsider the “losers” of Trumpcare. In this round Trump threatens to reduce the federal subsidies that enable poorer people to buy health insurance. Will this finally prompt the rich to say, “No way”?)
In the case of tax reform, there is time for the rich to show their heart. The last major tax reform bill, signed by President Ronald Reagan in 1986, took two years to hash out and assemble. And no doubt Trump will find the issue more complicated than he imagined. Thus the rich have time to organize and lobby for a more equitable tax system. But of course, organizing prowess is the least of it; growing a heart is.
For years, this writer has advocated for a George Washington visionary to step forth from the Wall Street or corporate sector, one who combines business acumen with a humanitarian feel for his/her fellow citizens, who’d propose the reforms that would put a human face on American capitalism, who’d rebalance America’s great experiment of Capitalism and Democracy ― to bolster the democracy that is faltering and temper the capitalism that is turbo-charged (and, by the way, bolster the USA brand). This visionary risks being called a traitor to his/her class, but also a savior of the nation.
Donald Trump is not that George Washington visionary, he is not a savior, but if he were pushed by his rich cohorts in a saving direction....
With America in trouble, perhaps decline, if our extractive elites stopped extracting and started shouldering their fair share of the tax burden, we might see a reversal of fortune.
Illustration: “The ‘Brains’” by Thomas Nast, 1871.
Carla Seaquist’s latest book is titled “Can America Save Itself from Decline?: Politics, Culture, Morality.” An earlier book is titled “Manufacturing Hope: Post-9/11 Notes on Politics, Culture, Torture, and the American Character.” Also a playwright, she published “Two Plays of Life and Death” and is at work on a play titled “Prodigal.”