On a recent trip to London, I got into a conversation with a wealthy oil and gas investor about climate change. He didn’t disagree we need to shift from fossil fuels to renewable energy, he said. His job is to make sure the lights in our homes still turn on while we make the transition.
Fair enough, I said. Would you support a carbon tax or a cap-and-trade program to speed up the transition?
“Sure,” he said, to my surprise, without hesitation. “As long as the revenue is spent on new technologies, and not given away to poor people.”
Ah. There’s always a catch.
At first, I thought it was a strange caveat, especially since we’d just got done talking about income inequality, an issue that he seemed quite concerned about. It wasn’t until I saw the Republican presidential hopefuls unveil their new economic plans that it all made sense:
I really want to do the right thing, he’s saying, as long as I don’t have to pay for it.
The reason for his concern, by the way, is that poor people have to spend a higher percentage of their income on oil and gas than rich people, so the burden of a carbon tax or a cap-and-trade program would fall the hardest on them. Many people think that’s unfair since (a) they’re already strapped for cash and (b) they’re not the ones profiting from all the carbon emissions. So progressive proposals usually include a rebate of some sort to ease their cost.
Our friend the oil-and-gas investor would rather give that money to — surprise, surprise — corporate America.
This, I realized, is the grand strategy of the new “reformocon” movement in the Republican party. No longer can a Republican run for president without admitting that the government must do something about our nation’s most pressing problems — but neither can he ask his friends in the One Percent to pay for it. Thus is born a new slogan: We win, you pay!
Mike Lee and Marco Rubio, two of the leading reformocons in the Senate, put this strategy to the test earlier this month when they released an ambitious tax plan centered around an expansion of the Child Tax Credit for middle-income households. Sounds great, right? Rather than cutting government spending for the middle class, these Republicans want to spend more. Heaven knows they could use it, after decades of dismal income growth. But who will pay for it?
Certainly not the rich. The Lee-Rubio plan eliminates taxes on investments, where they get most of their income, and it lowers the corporate tax rate and the income tax rate for the top bracket. Add it all up, and it turns out to be an enormous tax cut for the wealthiest Americans and barely any relief for everyone else.
And what happens when all these tax cuts increase the budget deficit by $400 billion a year? Well, if recent history is any indicator, these same Republicans will scream “Crisis!” and demand spending cuts. If you’re wondering where those cuts will come from, look no further than the latest Republican budget, which gets two-thirds of its cuts from programs that help low- and moderate-income households. It scorches their budgets by 40 percent!
So, who will pay for the reformocons’ new plans? You know who.
No sooner had the ink dried on Marco Rubio’s deceptive debut than his presidential competitor Jeb Bush announced, in a speech about income inequality, that he would abolish the federal minimum wage.
Among the reformocon movement, Jeb Bush is not alone in this desire. You may wonder how they can expand the Child Tax Credit in one breath and abolish the minimum wage in the next, since the two policies are basically intended to help the same people?
It’s very simple really, once you understand the “we win, you pay” principle. Wages are paid by corporations. Tax credits are paid by…well, you just saw who, and it ain’t the corporations.
So, for the reformocons: Tax credits, good. Wages, bad.
The most egregious example of this strategy is our first official presidential candidate, Ted Cruz, who’s advocating a “flat tax,” charging the same rate to everyone, regardless of their income. For that to work, he’d have to raise taxes significantly on most Americans in order to cut them significantly for the richest Americans because the only way to raise the same amount of revenue is to find a rate somewhere in the middle of what the two groups pay now. It’s basic arithmetic.
But you never hear the reformocons talk about arithmetic in their speeches. They talk about inequality and upward mobility and the American middle class. They talk about all sorts of expensive new plans, and they never mention that there’s a catch.
They can’t mention the catch because it undermines the entire point of their reforms. If they win, you pay. And if you pay, they’re not helping you after all.
So, who are they helping? You know who.
This op-ed was originally published in the Huffington Post.
Since Filippo has graciously allowed me to post this episode on my website, I encourage you to check out the rest of his show at LifeChangesNetwork.com.
The holiday season is supposed to be a time of giving. We give presents, money and love. We give to show we care, and we give to share our good fortune. But giving isn’t what it used to be.
Years ago, the richest Americans gave a lot more of their income than they do now. Back then, the economy was healthier, the middle class was wealthier, and the nation was less divided. The American experience was a shared experience. Giving, after all, is sharing.
Today, the income gap is growing. It hasn’t been this high since the Great Crash of 1929. The wider it grows, the less the rich associate with the rest of us, and the less they feel the need or the desire to give back.
Recent work by the psychologist Paul K. Piff has shown that people become more narcissistic as they get richer. Contrary to the conventional wisdom that the poor and the middle class feel “entitled” nowadays, Piff finds that entitlement is higher among the rich.
But Piff has also discovered something that should give us hope. In one experiment, before he tested them for narcissism, he asked them to write down three benefits of treating other people as equals. Suddenly, their narcissistic tendencies disappeared. In the rest of the experiment, they stopped thinking of themselves and started thinking, well, like everyone else.
The economy is stuck in a rut right now. Most Americans’ inflation-adjusted income hasn’t increased since the onset of the Great Recession. But Piff’s research shows us that this trend doesn’t have to be permanent. We have the power to change it.
That’s what I tried to do in my book Letter to the One Percent. In it, I reached out to the richest one percent of American households. I asked them to do what they did in Piff’s experiment: to think of their fellow citizens as equals.
But the real world is not an experiment. Outside the lab, changing hearts and minds takes a little more convincing.
In another recent experiment, marketing professors Saerom Lee, Karen Winterich, and William Ross found that most people drew a sharp distinction between deserving and undeserving recipients of aid. They were far more likely to donate money, for example, if they were told that a person was poor because he could only find a low-wage job than if they were told that the poor person had a drug problem. They didn’t think of these people as equals.
Since publishing my book, I’ve heard people make this distinction often in response to my message to the One Percent. And so, over the past year, I’ve written op-eds showing that the rich aren’t rich because they work harder than the rest of us; that the poor don’t lie and cheat any more than the rest of us (and in fact the rich lie and cheat more); that you can’t simply get rich by choosing to get an education; that people can’t make more money by being poor or unemployed; and that much, if not most, of the difference between the rich and the poor can be explained by childhood experiences over which they had no control.
Some of us have made better decisions than others. Some have been given better opportunities than others. But the belief on which this nation was founded, “that all men [and women] are created equal,” rings as true today as it did in 1776.
No one is arguing for complete equality of income. Not even close. We celebrate the success of the One Percent, and rightly so. All we ask, especially in this time of giving, is for the compassion, the humility, the shared experience that existed only a few decades ago.
Your voice is more powerful than you might realize. The researchers James Andreoni and Justin M. Rao conducted an experiment where they showed that people tended to give away four times as much of their money if the recipient simply asked for it. If the recipient was silent, the giver only donated a tiny fraction.
The message is clear: Speak up. Vote. And if you can afford to, give back.