“The American people are on our side,” says Rep. Keith Ellison, co-chair of the Congressional Progressive Caucus. “The time is now.”
Ellison was talking to a small group of writers and activists about higher tax rates for U.S. corporations. Although he was upbeat, Ellison acknowledged that winning those tax increases would be an uphill fight.
That kind of effort can’t succeed without widespread public action behind it. Can an organized movement be created to support tax increases for corporations?
When organizer and Harvard professor Marshall Ganz says that social change begins with the telling of stories, he’s not necessarily talking about the stories in this graph. Although taxation can seem like a dry subject, even a simple image like this one resonates with powerful and troubling tales:
This graph tells the story of a nation that is starving its government of funds for urgently-needed social services. In human terms, that’s the story of a child struggling to learn in an oversized classroom with flaking paint. Or of an elderly man in a one-room apartment whose Meals On Wheels deliveries stopped arriving weeks ago.
It speaks of corporations reaping record profits while paying less in taxes than at any point in modern history. That’s the story of lobbyists celebrating their latest big-business tax break over drinks at Tosca or the Old Ebbitt Grill in Washington.
It tells the stories of financial institutions like GE Capital, Goldman Sachs, Bank of America and Wells Fargo enjoying huge tax breaks even after repeatedly breaking the law. That’s the story of self-satisfied murmurs being exchanged in lower Manhattan boardrooms.
This image tells the story of Apple Inc., which earned its record profits through the taxpayer-funded education of its workforce, the taxpayer-funded inventions that drive its products, and the once-thriving middle class that has now been driven from the Silicon Valley.
That’s the story of the machinist who adopted Steve Jobs, raising him in a comfortable and upwardly-mobile way of life that is disappearing from Jobs’ home town.
This picture tells the story of individual Americans who must sacrifice so that these corporations can be indulged: Americans who pay more in taxes, receive less in government services, and watch as an economy which was once prosperous for the many increasingly serves only the few.
And it tells the story of the small and medium-sized businesses which have been left out of this tax bonanza, the real engines of jobs and growth which have been excluded from this holiday for the massive and the powerful.
As Keith Ellison says, “Your local coffee shop didn’t get any fat tax breaks.”
A Different Story
It defies today’s media narrative to imagine a popular movement calling for for tax increases. Our major press outlets prefer to attach the ‘populist’ label to anti-tax movements, especially the Tea Party. But the Tea Party’s anti-tax views are on the fringe of American opinion, while Ellison’s are very much in the mainstream.
A new study from pollster Celinda Lake illustrates the depth of American public opinion on this issue. More than half of voters in a recent survey said that it was “very important” that the next budget “ensure that corporations pay (their) fair share of taxes.” More than half also considered it “very important” to “close tax loopholes that benefit big corporations.”
Lake, who attended the gathering with Rep. Ellison, pointed to poll results showing that more than two-thirds of those polled were persuaded by messages like this one:
“We should end tax breaks for corporations that ship jobs overseas and use that money to invest in jobs in America – improving our roads and bridges, rebuilding manufacturing, and making us energy independent.”
Lake noted that certain messages resonated especially strongly with voters, including “Buy American, Hire American” and the description of offshoring corporations as “Benedict Arnolds.”
The public’s will harmonizes with that of economists who agree that more government revenue which can be invested in jobs, infrastructure, education, and anti-poverty programs would quickly translate into a healthier economy.
Man Bites Dog
For his part, Ganz was speaking of inspiring stories. He encourages the telling of individual and collective narratives that lead to successful change. Where will we find stories like that in this struggle?
People are discouraged. They increasingly feel that corporations always win. So we could begin by talking about ourselves: the world we knew as children, the world we hope to see for our own children.
We could speak of past victories against even longer odds: Breaking up the railroads and the trusts. The successful battles for workplace safety and the minimum wage.
And we could remind ourselves of the larger fight for economic freedom, which created the middle class and led to our longest period of national prosperity.
That fight was, and remains, the fight for the American ideal: a fair and just nation where anybody can succeed if they’re willing to work hard and play by the rules.
Our media frequently reports on the Tea Party as if it were a genuine grassroots movement, rather than a corporate-funded effort to tap into the public’s economic fears and political frustrations. Many of the public emotions driving the Tea Party could be constructively channeled into a movement for genuine economic justice.
A populist fight for higher taxes? To many reporters that would be what people in the trade once called a “man bites dog” story. And that’s news.
The Absence of a Debate
Unfortunately, the “left” side of the debate is currently represented by President Obama’s unwise proposal to “simplify” the tax code by eliminating many deductions and lowering the basic tax rate in a way that’s described as “revenue neutral.” “Revenue neutral”? That would freeze corporate taxes at their current, destructively low levels.
And while the president is right to oppose many corporate tax breaks, the net effect of his current budget proposal – his opening bid in negotiations with Congress – would only raise corporate taxes by one percent.
What’s more, the president’s proposal to eliminate many deductions would rob lawmakers of the tools they need to discourage abusive behavior, like polluting the environment and shipping jobs overseas, or to reward socially constructive behavior like hiring more Americans or investing in equipment that produces more jobs. His proposal to eliminate taxes on overseas profits would cut corporate rates even further.
Obama’s position on corporate taxation has become the de facto position of his party, thereby robbing the public of a real debate. On this issues, as with so many others, the majority’s will remains marginalized inside the Beltway.
It doesn’t have to remain that way.
The Coming Struggle
Change is possible. There’s a strong alignment between the interests and desires of most voters and those of small and medium-sized businesses. People overwhelmingly support increasing tax contributions from large corporations.
Why is the Washington consensus so out of touch with the public’s will or the needs of the economy? “You can have 70 or 80 percent of the people on your side,” says Ellison, “and still find that a highly organized minority can beat a diffuse majority.”
That’s true – especially when the minority in question contributes hundreds of millions of dollars to political campaigns, and has a habit of offering highly lucrative board memberships or lobbying jobs to politicians once they leave office.
But there are ways to counter that kind of influence. One of the best is by threatening politicians with the thing they fear most: losing elections.
And the time to act is now. “Inside Congress,” says Keith Ellison, “taxation is already a full-on conversation.”
“We’re not talking in isolation when we talk about corporate taxes,” Ellison adds. “We’re literally telling people we cannot afford Head Start, student loans, or Social Security.”
“We should look for opportunities to create and agitate the debate,” Ellison says. “There are members of Congress, even Republicans, who might be persuaded to end corporate tax giveaways.”
That’s not likely to happen unless corporate lobbyists’ concerted pressure is met with equally intense counter-pressure from an organized majority. Politicians are far more likely to change positions on an issue if they hear from their constituents in concerted and forceful ways, from frequent emails and telephone calls to public demonstrations. Democrats could be particularly responsive to the possibility of primary challenges against those who have become too corporation-submissive. But an effort like that will take hard work.
And work like that begins with stories.
Why it's important
Columnist Paul Buchheit points to a recent article by Les Leopold which shows our nation is near the bottom of the developed world in median wealth, probably the best gauge for the economic strength of the middle class. The source of the information, the Global Wealth Databook, provides additional evidence of our decline from our once-lofty position as an egalitarian country with opportunities for nearly everyone.
The data is summarized below. Column 4 reveals that the U.S. is near the top of the developed world in average wealth, in good part because of its many millionaires (Col 8). Median wealth per adult, in Column 5, is much lower. As a sign of the distance between America's middle class and its national wealth, Column 6 shows that the ratio of median to mean in the U.S. is lower than in any country except Russia.
As Buchheit notes, "Median-level adults in the U.S. get a smaller percentage of their nation's wealth than in any other country except China and India."