Republicans have a unique opportunity to be the dominant party for the next generation by addressing a gnawing problem in American society – the ability of the super rich to manipulate the political process for their own greed. The media concentrate on the top 1 percent, those who make comfortable six-figure incomes. But these individuals are not the problem. It is the top 0.01 percent, a class of super wealthy gods – those with a net worth in the hundreds of millions or billions – who use their economic and political leverage to distort the market place.
The United States is becoming a Third World country – where the rich get richer, the poor get poorer and the middle class work like dogs to remain middle class. Health care is unaffordable, private sector pensions are sparse, and jobs that can support a family with one income are few and far between.
One percent of the country now controls over 50 percent of the wealth. Jeff Bezos, Bill Gates and Warren Buffett now have a combined net worth greater than the lower 50 percent of the population. While CEO’s typically made 15 times the wage of their workers in 1960, it is not unusual now to see a CEO pulling down 400 times this wage today.
One factor is the low tax rate on the super rich. What is needed is a tax of 90 percent on wages and capital gains over $5 million annual income, except for the one time sale of a business. While this may seem extreme, this situation existed during the presidency of Republican Dwight Eisenhower — after adjusting for inflation — and the middle class thrived.
The low tax rate on the super rich has encouraged them to pillage the country. Leveraged buyouts (using taxpayer-backed money) of viable companies enabled investment bankers to raid pensions, slash health benefits, reduce wages and move jobs overseas. While the middle class got obliterated by the Great Recession of 2008, our super rich laughed all the way to the bank as our political class did their bidding.
Hedge funds and politically connected investment banks such as Goldman Sachs and Citibank were bailed out while our children and grandchildren received the bill. Even worse, the Dodd-Frank bill insures that future bailouts will not need the consent of Congress.
Meanwhile the Chairman of the Federal Reserve, Janet Yellen, is artificially keeping interest rates low so that the super rich can speculate with impunity, creating asset bubbles in commodities and in the stock market.
Senior citizens, who have saved their entire lives, cannot find a safe investment that yields 2 percent a year! Yet, American taxpayers bailed out Greece, Ireland and Portugal to the tune of billions. In fact, American banks and hedge funds bought worthless Greek bonds paying 22 percent knowing full well that our political class would give the taxpayer the bill.
And nothing has changed with the supposedly-populist Trump presidency. While the media amuses the populace with the sexual peccadilloes of our political class along with the Russian scandal du jour, few are aware that CVS is about to take over AETNA, or that Blue Cross is trying to merge with Cigna, creating health care monopolies that will enrich a few CEOs and Wall Street brokerage firms with billions while the average person is forced to pony up even more money for health care and medications.
Avaricious monopolies such as Google and Facebook are not only making record profits, but squelching the free speech of social conservatives such as pro-lifers. President Trump’s treasury secretary, Steve Mnuchin, is now maneuvering to see that his former pals at Goldman Sachs are bailed out on their purchases of defaulting Venezuelan bonds.
Elite athletes, who kneel during our National Anthem, become multimillionaires while billionaire owners of sport franchises, punt the cost of stadiums to the taxpayers. NFL Commissioner Roger Goodell is asking for $50 million along with health care and a private jet for life! Jeffrey Immelt, the former CEO of General Electric, utterly destroyed the company. Yet while the shareholders got obliterated and workers get sacked, he walked away with hundreds of millions! Nice work in you can get it.
Increasing taxes on the super rich will not significantly increase the coffers of the government. But it will change behavior and reduce income inequality. Furthermore, it will help the Republicans politically. The tech magnates, the corporate chieftains, the Wall Street zillionaires, the media moguls, the overpaid news anchors, the elite athletes and the snooty amoral Hollywood stars are overwhelmingly Democrats. They are the reason that Hillary Clinton raised $1.2 billion, the most of any politician in recorded history. There is nothing to lose by irritating them.
President Trump should betray his fellow billionaires, reassure his reelection, and increase taxes on the super rich.
Joe Bentivegna is an ophthalmologist in Rocky Hill.