Redistribution is a dirty word in politics, thanks mostly to 30+ years of Republican propaganda, but it has always been a facet of modern democracies. Even with a perfectly flat tax system, those with more money would contribute more to government coffers and thus provide more public goods to society.
In addition, a profound trend in the workplace will increase the need for income redistribution at exactly the time when strong political forces most oppose it. Blue collar manufacturing jobs have been shrinking due to automation for decades, despite continued U.S. growth in manufacturing output. These same forces are now threatening white collar jobs that were once thought immune to technological advances. Professionals like computer programmers, lawyers and doctors all face potential replacement by machines, decreasing the demand for these lucrative occupations.
Where, then, will our new jobs come from?
Developed industrial societies have gone through periods of innovation when whole professions have been swept away by machines. Even so, the pace of today’s innovation is so fast, and the effects so profound, that job creation may no longer be able to keep pace with increases in the labor force. The financial collapse coupled with the treasonous behavior of the GOP has already given us three years of historically high unemployment, with no end in sight.
The jobs that seem most impervious to innovation and automation—at least for the foreseeable future—tend to be service industry jobs. There’s nothing wrong with these jobs, but by and large they’re low- and middle-income jobs with little upward mobility. With continual increases in the costs of education and healthcare, it’s almost impossible to raise a family on the incomes these jobs provide.
This is why income redistribution is going to become increasingly necessary to prevent ever more Americans from falling into poverty. Redistribution doesn’t have to come in the form of direct handouts, but we are going to need larger subsidies for healthcare, education, preschool, and increased tax breaks that allow those at the bottom to increase their discretionary income. This money has to come from somewhere, and there’s no better place than the top 1%–who, over the past 30 years, have gained almost all of the increases in national wealth.
Increasing taxes at the very top will hardly decrease incentives to work, since taking a few extra percentage points out of the 10th, 100th, or 500th million dollar is unlikely to affect behavior. The people who make these exorbitant sums are motivated by many things other than money, and relatively meaningless changes in their after tax income is not a primary driver.
To those who argue that any diminished incentives on the entrepreneurial class will make all of our lives poorer (after all, who would want to dissuade a Steve Jobs from pursuing the Next Big Thing?), the truth is that few of the top 1% are entrepreneurs. They’re CEOs, financial service executives and the like, and they contribute few if any direct benefits to society. More than anything, they’ve gamed the system to pay themselves outsized sums (helped along hugely by a tax code that favors capital gains, dividends and stock options over wages).
America’s fiscal and employment problems can’t be solved simply by taxing the rich, but it surely would help. It’s simply immoral to cut college tuition grants, funding for Food Stamps and healthcare for children, while those at the top continue to reap unimaginable sums. As Senate candidate Elizabeth Warren so eloquently put it, no one in America gets rich on their own; it’s the institutions and structures we all pay for that provide them the opportunity to amass great wealth. Asking the wealthy to chip in a little more, after decades of having almost all of the nation’s income gains for themselves, is eminently fair. It’s not socialism, nor is it class warfare. It is simply updating the social contract to reflect the realities of the 21st century.
As usual, the Republican Party and a handful of Democrats beholden to Wall Street are on the wrong side of the issue. The Republicans not only want to shield the ultra-wealthy from additional taxes; the plans put forth by all of the presidential contenders would actually cut taxes for the rich and raise them on the poor and middle class.
Fortunately, a wide majority of the American people realizes that increasing taxes on the ultra-wealthy is both necessary and just. They might not like to call it income redistribution, but that’s what it is.
Given the employment projections of the next decade, it’s going to become increasingly urgent.
Jason Scorse