Friday, May 16, 2014

The Reverse New Deal: Nickel & diming the public with taxes, tolls, fees, and fines, to ensure tax breaks and tax loopholes for the rich

 (Is it fair to ask the general public to pay more & higher tolls for road maintenance, and to deal with the resulting increased traffic congestion, when so many millions of them are struggling with stagnant wages, higher prices, job insecurity, student loan debt, etc.....especially in light of the fact that the super-wealthy are getting wealthier and wealthier? Photo courtesy of

For the past 30+ years, we've granted colossal tax breaks to the wealthiest of Americans. The result? Taxes on the wealthy are historically low, and federal revenue is also historically low.

As federal revenue drops, potential federal aid to the states drops. When this happens, state and local governments start increasing taxes, tolls, fees, and fines on their captive population--the middle-class and poor (those people who cannot easily move to another state) to make up for the lower probability of federal assistance. Sure, these increases sometimes affect the super-rich too, but they can handle the cost increases very easily, or move to another state if it really bothers them. These increased taxes, tolls, fees, and fines are, of course, regressive (the less you earn the higher percentage of your income is extracted by the government to satisfy the tax, toll, fee, or fine).  

I have seen this happen in Maryland, my home state. In just the past few years, for example, the toll to cross the Chesapeake Bay Bridge has gone from $2.50 to $6.00--a 140% increase. This toll extracts a higher percentage of income from people of modest-to-low income.

Now, the Chesapeake Bay Bridge requires a lot of maintenance. But instead of increasing the cost for people of limited means, through increased tolling, why not create a new WPA to repair and maintain bridges and have it financed largely with federal funds? After all, the WPA engaged in 124,000 bridge projects during the New Deal era. Indeed, even Ronald Reagan praised this work, writing in his autobiography: "The WPA was one of the most productive elements of FDR's alphabet soup of agencies because it put people to work building roads, bridges, and other gave men and women a chance to make some money along with the satisfaction of knowing they earned it."

(WPA workers repairing a bridge connecting Mineral County, West Virginia, to Allegany County, Maryland, 1936. Photo courtesy of the University of Maryland College Park Archives.)

Of course, we're not going to create a new WPA, and that's because (1) the super-wealthy are enjoying historically low tax rates (and many--not all--don't want to see their taxes go up to help the unemployed or improve American infrastructure), (2) many super-wealthy Americans are avoiding & evading taxes with shelters and offshore bank accounts, thereby depriving America of hundreds of billions of dollars in revenue--revenue that could EASILY support a new WPA, (3) Corporate America is engaging in extortion against the United States, saying, in effect, "give us the lowest possible tax rates or we won't bother helping the country," thereby depriving America of even more billions of dollars of revenue, and (4) the super-wealthy control our Congress with campaign contributions and have no interest in a public jobs program (after all, they don't need a job).

(See a research study indicating that most of the general public would support the idea of a new WPA-type program, but most wealthy Americans would not (table 5, p. 57): "Democracy and the Policy Preferences of Wealthy Americans")    

One of the next steps to nickel and dime the public is probably going to be the increased used of toll roads. Instead of increased federal aid for road maintenance--as happened during the New Deal era--policy-makers are starting to push for the increased use of tolls to finance road and highway maintenance (see, e.g., "You May Have To Say Goodbye To Your Toll-Free Highways"). This will, of course, further burden struggling Americans--both in terms of income reduction and traffic congestion. "Won't the traffic congestion affect the super-rich too?" you might ask. Well yes--they may have to use their personal jets more often, or stock their limousines with more DVDs, food, and reading material. Or maybe just send their butlers or personal valets out for the groceries. "Let Jeeves deal with the traffic!"

(Road creation, repair, and improvement was one of the main endeavors of the WPA. As long as local governments were willing to fund part of the project, the WPA would kick-in the rest. WPA workers created, repaired, or improved 650,000 miles of roads, streets, and highways. That's enough roadwork to go around the Earth 26 times. Such work addressed two issues--unemployment and infrastructure. With a few exceptions, our political leaders at the federal level are too busy catering to their super-wealthy campaign contributors to even begin to contemplate a new WPA for the people.They're more interested in protecting the fortunes of billionaires than in providing for the common good. Photo courtesy of the University of Maryland College Park Archives.)       

So, the question is this: How much more of a battering are we going to take, to ensure that super-wealthy Americans are not inconvenienced by higher taxes on their ever-growing fortunes? Well, we're living in pretty sick times--times where billionaires are watching their fortunes increase by the billions while veterans die waiting for care from underfunded and understaffed medical facilities (thanks to Republican refusals to increase funding after they were warned years ago of impending problems)--so I fear that we're going to get battered a lot, LOT more before we've finally had enough. Indeed, millions of Americans stand ready to vote for even more Republican & Tea Party politicians who, in turn, are eager to grant even more tax breaks to the super-wealthy and cut even more services to people in need.

In any event, brace yourself for the traffic-jamming toll roads that are coming to a road or highway near you. You're going to have to start opening your wallet more frequently, in support of more trickle-down economics.

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