The case for class warfare

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By now, just about everyone who cares about the economic wars in America has read the Joseph Stiglitz piece in Vanity Fair. It's nothing new, really -- the same stuff a lot of people have been saying for a long time now. But the fact that it was written by a Nobel Prize winner and that the piece ran in a popular magazine typically dedicated to the lives of the rich and famous has brought a lot of welcome attention to the message:

In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow.

And:

Some people look at income inequality and shrug their shoulders. So what if this person gains and that person loses? What matters, they argue, is not how the pie is divided but the size of the pie. That argument is fundamentally wrong. An economy in which most citizens are doing worse year after year—an economy like America’s—is not likely to do well over the long haul.

And:

The more divided a society becomes in terms of wealth, the more reluctant the wealthy become to spend money on common needs. The rich don’t need to rely on government for parks or education or medical care or personal security—they can buy all these things for themselves. In the process, they become more distant from ordinary people, losing whatever empathy they may once have had. They also worry about strong government—one that could use its powers to adjust the balance, take some of their wealth, and invest it for the common good. The top 1 percent may complain about the kind of government we have in America, but in truth they like it just fine: too gridlocked to re-distribute, too divided to do anything but lower taxes.

Over at CalBuzz, they're talking about how class warfare may be the next big winning strategy in California politics:

As a political matter, it’s time for Jerry Brown to reach for his inner La Follette and start sounding some good, old fashioned, Wisconsin style populism. Instead of going after the railroads, as La Follete did, however, Brown should aim at the ultra-wealthy, the oil companies and other greedy corporate interests who have a) allowed the California Republican Party to gridlock the budget process and b) fought to keep special corporate loopholes, including outrageously low property tax rates from Prop. 13.

The latest polls show that more than 75 percent of Californians (including 60 percent of Republicans) think it's a good idea to raise taxes on people who make more than $500,000 a year. The California Federation of Teachers is talking about a ballot initiative for the fall. Brown ought to be on board with that; hell, he ought to be out front making the case.

I'd like to see some Inner La Follette in San Francisco, too. City Attorney Dennis Herrera, who seems to support the Twitter tax break, is at least talking about the need to refrom the local tax structure.  Although he's using the same dumb old language of the anti-tax folks:

The city’s economic analysts have estimated that the current business payroll tax depresses employment in San Francisco by 1 percent, by driving up costs to employers to hire more workers. For some real-life perspective, that’s about 5,500 jobs that would otherwise be available to unemployed and under-employed San Franciscans right now. City economists also blame the current business payroll tax for depressing local wages—which, in turn, depresses local spending.

Which is enough to make me scream. The payroll tax doesn't affect any rational business decision on hiring; it can't. It's just too minor a factor. And if you want to say that without a payroll tax, a company with several hundred employees might be able to hire a couple more, you're missing the point: The payroll tax is just a rough estimate for the size of a firm -- and if San Francisco had a gross receipts or commercial rent tax instead, that company would be paying roughly the same amount for a different tax.

Of course, if we had a better tax structure, more companies would pay; right now, so many outfits have so many ways to avoid the payroll tax that only about ten percent of local businesses pay it at all. And I'm in complete agreement with Herrera (and David Chiu, and others) who argue that we need to get rid of the payroll tax altogether and create a better, fairer business tax. But that's not because very modest taxes (and that's what the city charges) drive companies out of San Francisco or prevent job growth -- it's because too many pay nothing at all. (Yes, applying the payroll tax to stock options is a big financial disincentive. It's also easy to fix, without giving half of the central city a tax break that will cost hundreds of jobs. Yes: Cost jobs. Because when the city loses tax revenue, it has to lay off employees. Public sector jobs are jobs, too.)

I have been asking -- begging -- city officials for 20 years to get serious about tax reform, to put together a summit, a task force, a committee that can overhaul the entire local tax structure. But let's not talk about lower taxes creating jobs. That's just nonsense. Investment creates jobs. Good education and infrastructure attracts businesses. The goal of a new tax policy ought to be to make the city's revenue generation more progressive (the rich pay more) and more fair (almost everyone pays something) -- and to bring in at least a few hundred million more dollars a year.

In fact, the goal ought to be to follow the advice of Professor Stiglitz and do whatever we can here at home to fight wealth inequality (the same way we do our small part here in SF to fight global warming, childhood obesity and overuse of plastics).

I'm not a big fan of war, but I believe in self-defense -- and over the past 30 years, the powerful interests in this country have waged an all-out war on the poor and the middle class. And for the most part, we haven't bothered to fight back. We've surrendered, over and over again, and now we've become a nation of serfs, forced to work more hours for less pay with less security and a declining quality of life -- just so the top 1% can be richer than ever before.

At the great T. Pynchon wrote:

They've been paying you to love it

But the time has come to shove it

And it isn't a resistance, it's a war.

Right here in San Francisco, too. Can we at least talk about that? Please?