A Perverted Idea of Fairness

Wherever John McCain appears on the stump in these waning days of the presidential campaign, he is always accompanied by his imaginary friend “Joe the Plumber,” but it is the specter of Karl Marx that lurks just offstage. Reverting back to the Republicanism of eons ago, when he was just a child, he inveighs against the “socialist” design of Barack Obama’s tax platform. This delusional ranting, like so much of Mr. McCain’s behavior this year, tell us nothing about Mr. Obama (or socialism!) but much about him.

Let’s begin with the dishonesty of the McCain rant. What Mr. Obama proposes is to restore the tax rates on the wealthy to the same level as during the Clinton administration – that is, to allow the Bush tax cuts to expire without renewing them for individuals and families reporting more than $250,000 in annual income. There is nothing radical in this idea, let alone socialistic, (especially compared with the bank nationalizations and other violations of capitalist orthodoxy that Mr. McCain has supported recently as emergency measures).

Not only is there nothing radical about repairing the unfairness of those Bush tax cuts, but it is precisely the same position that Mr. McCain argued when they were first enacted. Is his memory so poor that he cannot remember saying that the Bush tax plan was “skewed” to benefit the rich? Having reversed that position for political convenience in the most craven way, he has also invented a different justification for opposing Mr. Bush back then – namely that he thought the cuts were fiscally irresponsible. But that isn’t what he said in 2000 and 2001.

Now let’s address the ignorance of his rant. Progressive taxation is a tradition of Western economics that dates back considerably further than Marx and the Communist manifesto, with all due respect to the wingnuts who seem to be writing those McCain speeches. He admits that he has neglected his economic studies, so perhaps he isn’t aware that Adam Smith, the revered philosopher of market capitalism, advocated tax fairness as far back as 1776, the fateful year when he published the first edition of The Wealth of Nations.

Although there was no income tax, Smith’s principled judgment on the justice of higher taxes on those who could pay more, enunciated on several occasions, could not be clearer. He favored property taxes and luxury taxes because they would fall most heavily on the wealthy. He would have levied a sizeable tax on all seven of the McCain homes plus an additional chop at all of Cindy McCain’s credit card binges.

In Wealth of Nations, Smith wrote:

“ The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

Few legislators are more familiar than Mr. McCain, in his maverick incarnation, with the enormous fortunes raked in by oilmen, defense contractors, bond holders, and the whole host of modern capitalists under the protection of the American state. The notion that those fortunes, often gotten in a parody of the free market, should be taxed at the same rate as the earnings of a plumber would strike Smith as monumentally unjust and as an attack on the foundations of society.

Finally, let’s discuss the other bit of demagoguery in Mr. McCain’s most recent speeches – when he complains about the “redistribution of wealth” and equates an income tax rebate for working people with “welfare.” Leaving aside the racial subtext of those remarks, it is hard to say whether they display ignorance, dishonesty, or both. The American tax system, like all other taxation in modern nations, has always redistributed wealth. Sometimes it sends streams of money upward, from low-income taxpayers into the pockets of corporate executives; at other times it sends those streams downward, to assist the very poor.

But to cast socialist aspersions on a tax refund to working families whose incomes are too low to pay income taxes is to paint a big pink stripe onto Mr. McCain’s supposed idol, Ronald Reagan. Early in his presidency, Reagan signed legislation greatly increasing the Earned Income Tax Credit, a credit for low-income workers that reduces the impact of payroll taxes in order to boost take-home pay above poverty levels. When the credit is more than the amount of federal income taxes owed by an individual, that person receives a tax “refund.”

Reagan praised the earned income tax credit as the best “anti-poverty” and “pro-family” legislation ever enacted by Congress. It is troubling to learn that according to Mr. McCain, the Gipper was a socialist, too,