Which way to the revolt?
by Tom Sullivan
Robert Reich sees Donald Trump's and Bernie Sanders' rising popularity as evidence of a growing revolt against America's ruling class. Go figure. When venture capitalist Tom Perkins last year compared Occupiers and progressives to Kristallnacht, then held up his watch on TV and bragged, "I could buy a 6-pack of Rolexes for this,” he was less than six degrees of Marie Antoinette. And just as clueless.
Reich writes:
We’ve witnessed self-dealing on a monumental scale – starting with the junk-bond takeovers of the 1980s, followed by the Savings and Loan crisis, the corporate scandals of the early 2000s (Enron, Adelphia, Global Crossing, Tyco, Worldcom), and culminating in the near meltdown of Wall Street in 2008 and the taxpayer-financed bailout.
Along the way, millions of Americans lost their jobs their savings, and their homes.
Meanwhile, the Supreme Court has opened the floodgates to big money in politics wider than ever. Taxes have been cut on top incomes, tax loopholes widened, government debt has grown, public services have been cut. And not a single Wall Street executive has gone to jail.
Reich continues:
In 1964, Americans agreed by 64% to 29% that government was run for the benefit of all the people. By 2012, the response had reversed, with voters saying by 79% to 19% that government was “run by a few big interests looking after themselves.”
The left wants to rebuild the system while the angry right (exemplified by the T-party) wants to burn it down, Reich writes. As American families saw their net worth plummet and lost jobs and homes in the Great Recession, the ruling class Hoovered up more of America's wealth, even as it bitched about bonuses and taxes, and as hedge fund managers rallied to defend the carried interest loophole. Lynn Parramore explains that one at Naked Capitalism:
The carried interest loophole, as economist Dean Baker put it, is likely the worst of all the “sneaky and squirrelly ways that the rich use to escape their tax liability.” It goes down like this: Hedge fund managers brazenly claim they deserve to pay a special low tax rate on the money they earn overseeing the funds they manage because, um, it’s not guaranteed. So they pay 20 percent instead of the 39.6 percent they would pay if the money were taxed as ordinary income. They get very rich from this windfall, just ask Mitt Romney. But you know what? Lots of workers have no guarantee about the money they’ll earn, from people selling cars to the guy who just served you a burger. Do they get a special tax rate? No, they don’t. They pay full freight. In fact, almost nobody’s income is guaranteed. You could get a pay cut tomorrow. Or a pink slip. Do you still pay regular income tax? Yep, you do.
This unfair tax break basically allows hedge fund managers to screw their fellow Americans out of money that could do things the illustrious patrons of the Robin Hood Foundation claim are so dear to their hearts, like building schools and feeding the poor. According to a Congressional Research Service cited in the Hedge Clippers report, closing the carried interest loophole would generate $17 billion a year. How many hungry children in New York City could that feed? All of them.
In exposing the Robin Hood Foundation's brand of billionaire philanthropy, the Hedge Clippers report shows that "for every dollar the Robin Hood Foundation hedge fund managers studied give to the organization’s antipoverty efforts, they soak up $44 from the public in the form of tax avoidance and anti-tax advocacy. The authors of the report believe that to be a conservative estimate," writes Parramore.
That's pretty revolting right there. And now, cake?