Tuesday, November 07, 2017

It May Be Legal, Barely, But It's Not Victimless. You Oughta Know Better.

Rich folks see themselves as victims. It's just not fair that they should have to cough up a sizeable chunk of their hard-earned cash to the government. That's why so many stash that cash in tax havens, all within the letter of some very accommodating laws.

Not many little people get to shelter their equally hard-earned cash. It goes on food, clothing and shelter for the family and, yes, a chunk to the taxman.  It doesn't compare to what the rich guy pays the taxman. He pays loads more. And there's the argument for tax shelters.

However if you follow that scenario through just a bit more you'll see how much more, as a percentage of overall income, the rich guy has to spare. It's enough that the three richest Americans - Gates, Bezos and Buffet - have amassed more wealth in their lifetimes than the bottom 180-million of their countrymen.  That's the cash that goes into those carpet bags that winds up within spitting distance of some tropical beach, way beyond the reach of the taxman.

It's not just money shielded from taxes, it's a different sort of money. It's money that fuels inequality in all its forms - inequality of income, inequality of wealth, inequality of opportunity. The taxes not paid on that money become taxes levied on those of more modest means who cannot shelter their minuscule incomes.  Tax havens may be legal but they are not victimless - assuming you accept that we're all equal citizens of this same country.

Teddy Roosevelt explained the difference between ordinary money and what today has become tax haven money.

In every wise struggle for human betterment one of the main objects, and often the only object, has been to achieve in large measure equality of opportunity. In the struggle for this great end, nations rise from barbarism to civilization, and through it people press forward from one stage of enlightenment to the next. One of the chief factors in progress is the destruction of special privilege. The essence of any struggle for healthy liberty has always been, and must always be, to take from some one man or class of men the right to enjoy power, or wealth, or position, or immunity, which has not been earned by service to his or their fellows.

At many stages in the advance of humanity, this conflict between the men who possess more than they have earned and the men who have earned more than they possess is the central condition of progress. In our day it appears as the struggle of freemen to gain and hold the right of self-government as against the special interests, who twist the methods of free government into machinery for defeating the popular will. At every stage, and under all circumstances, the essence of the struggle is to equalize opportunity, destroy privilege, and give to the life and citizenship of every individual the highest possible value both to himself and to the commonwealth.

Did you catch that last part, how equalizing opportunity is essential to enabling the nation to get the "highest possible value" from its citizens. It's about building a stronger, better, more prosperous country.

Practical equality of opportunity for all citizens, when we achieve it, will have two great results. First, every man will have a fair chance to make of himself all that in him lies; to reach the highest point to which his capacities, unassisted by special privilege of his own and unhampered by the special privilege of others, can carry him, and to get for himself and his family substantially what he has earned. Second, equality of opportunity means that the commonwealth will get from every citizen the highest service of which he is capable. No man who carries the burden of the special privileges of another can give to the commonwealth that service to which it is fairly entitled.

Roosevelt knew that not all money is equal.

We grudge no man a fortune in civil life if it is honorably obtained and well used. It is not even enough that it should have been gained without doing damage to the community. We should permit it to be gained only so long as the gaining represents benefit to the community. This, I know, implies a policy of a far more active governmental interference with social and economic conditions in this country than we have yet had, but I think we have got to face the fact that such an increase in governmental control is now necessary.

No man should receive a dollar unless that dollar has been fairly earned. Every dollar received should represent a dollar’s worth of service rendered — not gambling in stocks, but service rendered. The really big fortune, the swollen fortune, by the mere fact of its size acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes, and in another tax which is far more easily collected and far more effective — a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate.

And then there's this. Not from Marx or Lenin or Trotsky but from the guy who led the charge of the Roughriders up San Juan hill.

Nothing is more true than that excess of every kind is followed by reaction; a fact which should be pondered by reformer and reactionary alike. We are face to face with new conceptions of the relations of property to human welfare, chiefly because certain advocates of the rights of property as against the rights of men have been pushing their claims too far. The man who wrongly holds that every human right is secondary to his profit must now give way to the advocate of human welfare, who rightly maintains that every man holds his property subject to the general right of the community to regulate its use to whatever degree the public welfare may require it.

Roosevelt's words stand as an indictment of our current government and previous regimes going back decades, generations. They lost sight of these essential truths and our nation is the poorer because of it. They went along to get along. They accommodated the "swollen fortune" and sacrificed equality of opportunity in the process.

Yes it's legal that Paul Martin's fortune be offshored, first to low-tax haven Barbados and then on to no-tax haven Bermuda. But is it right? Are we to be the doormat of the Paul Martins of this world? It's all the worse that much of this wealth is, in one form or another, gifted from mentor to apprentice, from father to son, the very foundation to perpetuate oligarchy. We're seeing entire generations who, by accident of birth, come into wealth they have not earned, a class of men who "have been pushing their claims too far."

It's time to push back.


Lulymay said...

As I've mentioned previously, we spend a few months in Arizona every winter. The "Arizona Republic" a right wing newspaper primarily printing articles on behalf of their right wing state state government, had an interesting piece a few years back.

Someone had diligently investigated who in their great society was most likely to contribute to charity. Turns out that it was the poorer segment of US citizens that set aside the highest percentage of their earnings for charitable donations. It seems that these folks always believed that there was always many more who were poorer than themselves and therefore needed help.

Interesting indeed! I have often observed that the wealthier segment, including corporations, would rather see their names printed in the local society column or more importantly see their names in lights over stadiums, arenas, playhouses and sometimes even a wing of a local hospital.

The Mound of Sound said...

From what I've read over the years what you've observed is indeed representative of wealth today, Lulymay.

Lorne said...

Lulymay's comment puts me in mind of something Ma Joad says in The Grapes of Wrath, Mound, something to the effect that she has learned that when you need help, turn to poor people. As it was then, it is now. The ultra rich, as I indicated in my post yesterday, have a hard time entering into the "kingdom of heaven," as it says in the The Bible, because they have little or no connection to their fellow human being; when there is no communing of the spirit, there is no communing with the transcendent.

The Mound of Sound said...

Before I relocated to the island I lived for a while in a relatively affluent part of West Vancouver. It was a mixed area, some modest, some very well off.

I did canvassing for the Cancer and Heart charities. Experience taught me to dread going door to door in the richest neighbourhoods. The buggers wouldn't even answer the door. In the more ordinary neighbourhoods people were often very warm and generous.

Trailblazer said...

We had the same experience in Nanaimo manning the SAlly Ann's kettle.
We collected nearly three times more at the less affluent ,south end, than the more affluent north end of town.

The soup kitchen is also manned with volunteers from the less well off!


John B. said...

When the generally passive enterprise of simply possessing wealth beyond what's required to fulfil the basic needs and a few other non-essentials becomes a principle driver of economic activity, then sooner or later it's all going to end up in one place. Eventually, one guy might end up owning everything, including most of the pitchforks.

The Mound of Sound said...

Well, John, when the need comes I'll lend you a spare I keep in my garden shed.