Failed Empire

Chronicling the collapse of a failed society

Tax the Rich: Government Should Not Exist to Aid the Wealthy

Continuing with the taxation theme, I found one comment in the discussion following “Save the Rich, Pay Your Taxes” to be extremely relevant.  A reader named Nicholas posted the following:

The average rich person will derive an enormous benefit from government spending compared to the janitor. It’s thanks to public subsidies that most industries are even profitable in the first place. Capitalism works by externalizing costs, socializing losses and privatizing profits. “Private” enterprise is possible at a profit because the public sector (and/or future generations) carry most or all of the costs of pure research, technological development, infrastructure, educating the “human resources,” health and environmental impacts.

The government, moreover, provides direct subsidies and/or bailouts and/or massive contracts to many large corporations, again with the greatest benefit accruing to the rich. The only reason someone can make more than a million dollars a year is thanks to a complex economy that would collapse without the infrastructure and services provided by the public sector.

Oh, and did you notice that in 2008 the unregulated private system that ran exactly by the rules that the capitalists desired failed miserably and 100 percent predictably, and then blackmailed the public sector into rescuing it? This cannot be emphasized enough: In 2008, capitalism failed. By its own rules. And then terrorized the world into rescuing it. And now continues to plunder it.

The janitor is likely to get nothing from the “defense” budget, the wars, the overseas bases, the black budget, or the interest on prior debt (most of it accumulated due to “defense” and war spending or to rescue the banksters). These are already most of the discretionary budget. These end up benefiting shareholders in the big corporations before the janitor gets any (and if he owns a couple of shares of the right item, then bully for him and his negligible windfall).

The post is extremely well-written and contains a plethora of valid points about American-style pseudo-capitalism and the role of taxation in our society.  It is a common belief that poor people present a heavier burden to tax-payers than the wealthy.  Such a belief is entirely wrong, and ignores the reality of how tax revenue is collected and spent in the United States.

Welfare and other social services have never received trillion dollar bailouts, nor do they receive extra supplemental spending bills in addition to their near-trillion dollar annual budgets.  In stark contrast, the military receives some $700 billion each year in its ordinary budget, but actually claims a considerably larger sum when all related costs are accurately accounted for.  The financial sector, as we all witnessed in 2008, has the guarantee that regardless of their foibles, whatever the cost, they have the backing of the federal government — even if, as we have seen, costs approach the trillions.  Is this genuine capitalism?  And if not, is capitalism the system we truly wish to have?

Nicholas was absolutely correct in pointing out that in 2008, capitalism failed.  The financial crash was brought about by the reckless, unregulated actions of banksters and investors – it was unfettered capitalism at its worst.  The result was what everyone should have expected in a cutthroat, survival-of-the-fittest system:  a few powerful elites at the top reaped unprecedented profits, but everyone else got screwed.

We hear endless rhetoric about the free-market system, how the competition of a capitalistic market naturally balances itself out, reaching some mythical, Zen-like state of homeostasis that government is constantly attempting to impede. But such a state is mythical:  give the sharks free reign, and they won’t stop until they have gobbled up every last fish in the sea.  Monopoly or collapse is the inevitable result of a true free market, and anyone who preaches otherwise is either lying or ignorant.

Most wealthy people realize this, and except for a powerful few no one is actually vying for a genuine free market.  Instead, the federal government is used as an aid to prop up various sectors of the vast corporatocracy, existing solely as a means to transfer wealth from the masses to the elites.  The military-industrial complex has been working towards that end for generations, but the pillaging has become ever more apparent as the corporate bailouts of the last few years have amply demonstrated.

At the heart of this issue of taxation lie fundamental questions about who are as a nation.  Most Americans believe in the virtues of free-market capitalism because they have been brainwashed to do so and fail to comprehend the actual results that will arise from such a system.  If Americans realized the inherent flaws – or, in the eyes of some, virtues – of capitalism, most would recoil in horror.

I don’t think anyone actually wants to live in a country where unfettered greed is the absolute law, where those with the ability to take advantage of others survive and thrive, while those who lack such predatorial instincts perish.  But they key lies in education:  what will it take to make people realize that the current system benefits no one but the very rich?  There lies the unanswerable question.


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