OBy Daniel Hargreaves
ne of the most polarizing and misrepresented issues in politics today is taxation. Contrary to what the George W. Bush administration would have you believe, taxes are not evil.
Taxation is the most fundamental vehicle for redistributing wealth, a notion wealthy authorities dismiss because it is not in their fiscal interests. For example, let’s say we raise income taxes by 1 percent. A family of four making $40,000 a year chips in $400; the affluent businessman making $4 million a year surrenders $40,000. This yields $40,400 to be redistributed among the population and averages $8,080 to be spent in the interest of each of these 5 people.
It is true this redistribution is not direct; the government does not cut a check to each person. There are, however, very perceptible benefits to everyone, benefits that contribute to the very fabric of society – education, health care, local and national security, social security, alternative energy research, welfare and community initiatives, to name a few. In weighing corporate opulence versus strengthening the fabric of society, however, our government’s capitalistic zeal falls on the same side almost every time – lower taxes for everyone, especially corporations.
This is not to say corporations don’t serve a purpose; they create jobs. I question, however, why it is necessary to repeal the stock dividend tax for them to create those jobs. First off, is there a stipulation requiring corporations to invest the money they save from tax cuts on job creation and expansion? No. Second, in an erratic market, is expansion always the best business practice for a corporation? No. There are other means of accomplishing job creation, means that do not require capitulation to highly subjective (and undeniably self-serving) corporate points of view.
According to Washington Gov. Gary Locke, “Under the president’s proposal to eliminate taxes on stock dividends, the top 1 percent would get more tax relief than the bottom 95 percent of taxpayers combined.” The top 1 percent (for all intents, corporations) need money to create jobs but are unsure of where and when to expand in an unpredictable economy. The 95 percent (common workers) need money to spend. As Bush himself said, “Jobs are created when the economy grows; the economy grows when Americans have more money to spend and invest.”
Does it not make sense to give the bulk of tax breaks to the 95 percent of Americans who will in turn spend money on goods and services provided by the corporations? Would not corporations then have an economic indicator as to how and where to expand, as well as the money to do so? How much of the stock market is owned and managed by the very executives of corporations who are pushing to get this initiative – their initiative – passed into law? Who will stand to gain the most out of the deal? If tax cuts are in order, they certainly shouldn’t be weighted toward the privileged few.
Repealing the stock dividend tax will only expand the divide between rich and poor. It is not a means of fair tax reduction. The top 1 percent doesn’t need more tax breaks, they want more tax breaks. The inverse is true of the bottom 95 percent.
The concentration of wealth in this country has reached a critical pass. As is evident by the recent bout of corporate fraud and corruption, Adam Smith’s “invisible hand” is stealing fistfuls of money, not governing the market fairly. Avarice is both the cornerstone and blight of capitalism. So how do we overcome the rampant deceit of corporate America? Not with government regulation – that’s been tried and failed miserably. We must educate the 95 percent, thereby creating more informed citizens to keep vigil.
Despite its obvious benefits, education is incredibly under-funded in our country. This is for two reasons. One, our culture is content with mindless entertainment; it is easier to rate someone’s sex appeal than to check the “facts” given to you by politicians and businessmen. Two, an educated person is far less likely to blindly believe what he or she is told, without questioning the facts. This reality is well known in corporate America and is obviously not congruent with the Bush administration’s recent “trust us” tactics. As long as the general public remains satiated by an ethically hollow entertainment industry, the leaders of billion-dollar enterprises will continue to abuse their fiduciary status with a malfeasance unsurpassed in history.
It cannot be denied that wealthy corporations sway government spending and policy, whether directly or indirectly. In turn, the government wields a deceptively persuasive weapon: media manipulation aimed at the uninformed public. The truth is obfuscated to fit their own motives, principled or not, and facts are fabricated to back up mendacious policies, fiscally responsible or not. It is more profitable for corporate powers to push distractions on the easily distracted masses than to tout education; an educated society who scrutinizes its means and motives would be a bane. Granted, an educated society would be less likely to abuse drugs or commit crime, but these benefits are irrelevant; corporations’ control would be diminished, their power reduced, their profit margins contracted – and that is unacceptable business practice.
Daniel Hargreaves is a University senior. He welcomes comments at [email protected]. Send letters to the editor to [email protected]
