Obama’s “Buffett Rule” fraud and the need for socialist planning
of Jerry White and SEP presidential candidate
19 April 2012
Millions of hard-pressed working class and middle class households in the United States filed their federal and state taxes this week. At the same time, the accounting firms and financial advisors of the wealthiest Americans finished ensuring their clients paid as little as possible.
After decades of tax cuts for the rich by both big business parties, many large corporations pay no taxes at all. Meanwhile, billionaire investors exploit loopholes to pay only a nominal rate. According to the Wall Street Journal, federal tax collections from corporations amounted to just 1.3 percent of Gross Domestic Product in 2010. This is well below their mark of 2.7 percent in 2006, and far beneath their peak of 6.1 percent in 1952.
The tax burden on those least able to pay has never been greater, even as wages stagnate. Moreover, government deficits—largely created by the tax cuts to the wealthy—have been used to slash funding for vitally needed social programs.
In his effort to distinguish himself from Mitt Romney—a Republican challenger with which Obama has no substantive policy differences—the president in recent days has been pushing for the passage of the so-called Buffett Rule. This measure—which would make households with annual incomes above $1 million pay a minimum income tax rate of 30 percent—would introduce “fairness” into the tax system, according to Obama and his political handlers, by making millionaire hedge fund managers pay the same tax rate as ordinary workers.
The promotion of the Buffett Rule is a cynical electoral maneuver, which, in any case, has little or no chance of being voted into law. Its real aim is to allow Obama to posture as a friend of working people even though he has dutifully served the interests of bankers and corporate executives since taking office three-and-a-half years ago.
Like his Republican predecessor, Obama oversaw the bailout of the Wall Street banks that totaled more than $20 trillion. Not only have the financial criminals who provoked the worst economic crisis since the Great Depression of the 1930s gotten away scot-free, but Obama’s policies have assured that they are doing better than ever. In the recent period, the top one percent of Americans raked in 93 percent of the total increase in national income.
It is a measure of the extremely right-wing character of the entire political system that a proposal for the wealthiest section of the population to pay the same percentage of taxes as the poorest is presented as a significant reform.
The Buffett Rule is in fact compatible with the “flat tax” long championed by the Republican Right. It is a repudiation of the progressive taxation system introduced 100 years ago. At a press conference earlier this week Obama assured the rich that the Buffett Rule “is not an argument about redistribution.”
The Democrats are not proposing to raise the tax rate on the richest Americans, which currently stands at 35 percent—the lowest level since the early 1920s. It is far below the 91 percent rate of the 1950s and 1960s and even the near-50 percent rate under Ronald Reagan.
In reality, the campaign for the Buffett Rule is aimed at creating a political cover of “equal sacrifice” and “balance” for an historic attack on social programs that millions of workers, young people and retirees depend on. Obama and the Democrats have already signaled their willingness to collaborate with the Republicans to slash Medicare, Medicaid, Social Security, food stamps and other basic social programs.
Moreover, whatever tax “reform” the Democrats and Republicans finally agree to will only lead to further tax cuts for the corporations and the wealthy. The White House has already proposed lowering the corporate tax rate from 35 percent to 28 percent in the name of “creating jobs.”
As the presidential candidate of the Socialist Equality Party, I call for the implementation of a genuinely progressive income tax that places the burden of taxation on the rich, while lowering taxes for the vast majority of the population. Taxes on the profits of all corporations must be sharply increased. The vast sums of wealth accumulated by a tiny elite must be reclaimed and put to the productive use of society as a whole.
An increase in taxes on the wealthy is not in itself a socialist measure. However, in the face of the total control exercised by the financial lords over the entire political system, even such a reform would require a revolutionary transformation of society. So too, the bitter resistance of the French nobility and the clergy to the lifting of long-standing tax exemptions and privileges set into motion the Revolution of 1789.
A revolutionary movement of the working class must have as its aim the socialist reorganization of economic life on a world scale. None of the rights of the working class—the right to a job, to a quality education and health care, to a secure life and future—can be met within the framework of a social system dictated by the profit interests of the corporate and financial elite, which makes far more money through financial speculation and fraud than in the creation of real value.
A vast expansion in the productive capacity of mankind can be achieved, but only when the great forces of the economy—including the giant banks and corporations—are placed under the democratic control of the population and run on the basis of a rational plan to meet social need and not private profit.
The fight for this program requires mass struggle and the building of an independent political movement of the working class, irreconcilably opposed to the two big business parties and the capitalist system they defend. It is to this end that the Socialist Equality Party is running in these elections.
For more information on the SEP campaign and to get involved, visit socialequality.com