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Republican Politicians and the Forbes 400

05-08-2011 by Linda S. Carbonell

The Detroit that's not in the commercial.

While you read this, bear in mind that House Speaker John Boehner has just said that there must be “trillions of dollars” of cuts from the 2012 budget before the House Republicans will vote to raise the debt ceiling. If we do not raise the ceiling, if we default on our debts by so much as 24 hours, we will literally crash the world’s economy. The Republicans are insisting that all of the cuts come from the 12% of our budget that is “discretionary spending” – that means all our social safety net programs, and from Medicare and Social Security. None must come from defense (where we spend almost half the money spent in the world on defense) and there must be no changes to our tax code or increase in taxes. This is blackmail. In any other scenario, threatening an action that would cause devastating consequences unless a payment is received would be a criminal act.

I can’t really say that the Forbes list of the 400 wealthiest Americans ever interested me too much. That changed when I read that there are almost 500 billionaires in America. Billionaires? Whatever happened to millionaires? When did we hit the point where there were more billionaires than the 400? Just to put these 400 in perspective, they hold as much wealth as the bottom 155,000,000 Americans. Allegedly, if we stripped them of all their wealth, it still wouldn’t amount to the national debt. No one is suggesting they be stripped.

The 400 is an interesting list. Let’s get the good guys out of the way first. Forty-three of the 400 have taken the Buffett-Gates giving pledge. Four of them are in the top ten – Gates, Buffett, Larry Ellison and Michael Bloomberg.

The other six in the top ten are Kochs and Waltons. The exemplify almost all of the people who have a company or industry behind their names. These are the owners of companies that, because they are privately held are classified in the tax codes as “small businesses.” HCA Health, which owns hospitals, has 190,000 employees. Cargill has 130,500. The Kochs have 70,000. The Waltons are the largest employers in the world. These business owners qualify for every tax break that is sold to the public as helping “small businesses.” They also have the ability to keep their personal taxable incomes very low. It’s a little complicated. A company owner can draw only as much money as he or she actually needs for personal expenses. With a really, really good accountant and tax lawyers, H. Ross Perot paid less in personal income taxes in 1991 than a family of four with a median income. Twenty of these 400 made their money in the oil and gas industries, which have their own sets of tax breaks and incentives on top of those available to small businesses.

So, what would these small business owners want from our elected officials? The answer is in a simple phrase “tax expenditures.” Those are the hundreds, maybe thousands of tiny little tax breaks, incentives, deductions, exclusions, whatevers that are available to these companies and their owners. “Tax expenditures” is a true government oxymoron. There is nothing expended by the government. These are the things that prevent the government collecting taxes. Calling them “tax barriers” would be more accurate. Even publicly traded companies – companies that issue stock that can theoretically be purchased by anyone – have their own set of “tax expenditures.” Those are the breaks that not only made it possible for General Electric to pay no taxes, but got them over $3 billion from the U. S. Treasury in tax returns – on the taxes they didn’t pay.

103 of the 400 made their billions in hedge funds, money management, investments, leveraged buyouts, equity trading, and venture capitol. While my friend was watching her 401k lose over $60,000 in one day, these people were moving into the billionaire classification. They have one big tax advantage – the capital gains tax rate. Let’s just take one man – hedge fund manager John Paulson. One one deal, the one Goldman Sachs admitted was a shitty one, he turned over a $3 billion profit for his clients. He was gambling that our mortgages would be foreclosed because the people holding our adjustable rate mortgages decided it was better to foreclose than to keep the rates affordable. As the manager of the hedge fund, he only paid the 15% capital gains tax rate on his commission, instead of the 35% income tax rate. That’s a 20% savings. It isn’t just the investors who only pay a 15% tax on the profit they make when they sell stocks, it’s the people who arrange those sales who also benefit from those tax rates. One quarter of these people are on this list because of the deregulation of the financial industry. The capital gains tax was instituted to encourage people to invest in businesses, not to push their brokers into the Forbes 400.

So, what would these 103 want from our elected officials? Repeal of the financial reform law passed last year that didn’t really go far enough to protect us from another stock market dive.

In the #5 and #6 slots on the 400 are the Koch brothers. They are the most blatant and open about their contributions to political causes. They have funded some of the most “respected” conservative think tanks – The Heritage Foundation, The Cato Institute and others, most with very patriotic names. These groups direct conservative public policy. The also funded Americans for Prosperity, the big name in the Tea Party movement. Rupert Murdoch is at #38. He has a whole television and newspaper empire to help protect his $6.2 billion by twisting the news to make people vote for politicians who will then shaft them to help out the top 2%.

There are people on this list who are not doing everything possible to elect Republicans who will protect their “tax expenditures” and repeal financial services reform. George Soros is at #14. Buffett, Gates, the other 41 believe that they should give back in some way. Soros’ MoveOn.org isn’t enough. It isn’t any of these people who are funding organizations that are in the top ten groups funding elections. Only the three largest unions are funding Democrats and are in the top ten. Those unions are being attacked by the people on this list who don’t want to pay decent wages or give decent benefits.

They are also, amazingly, the people who are most resistant to the idea of nationalized health. For decades, other businessmen have said that a nationalized health system is what this country needs to compete in the global marketplace. Thirty years ago, Lee Iacocca said that health insurance added over $1,000 to the price of every American-made car. No one even talks about that anymore. We pay almost twice as much per person for health care as the next most expensive country and don’t crack the top ten for health care delivery. The difference in our costs is in the for-profit nature of our health care industry and the insurance industry, not in superior health care.

To give these people and their companies even more tax breaks, Florida Governor Rick Scott wants to cut $1.6+ billion from education and public services. Governor Scott Walker of Wisconsin wants to cut $1 billion. These aren’t cuts that will balance their state budgets. They are just ways to give more money to that top 2% of Americans.

To achieve this, they have convinced a large part of the electorate that the goal is to cut taxes for the 98% of us, to cut off welfare to illegal immigrants who can’t get welfare, to cut off unemployement benefits because those subsistence payments make people lazy. To increase the Waltons’ share of those billions, they spread the doctrine that part-time jobs with no benefits is the new definition of employment. To protect the billions made by those owning retail chains, they are pushing the idea that unions are bad, so that the nascient movement to unionize their own stores will die. It’s been remarkably successful – persuading people that we should strip union workers of their pay and benefits to bring them down to the lower level all of us are supposed to accept. To fulfill the Kochs’ John Birch Society vision, they convince people that immigration is wrong and everyone who isn’t “like us” must be driven out – Jews, Muslims, Hispanics, Asians, everyone who isn’t white and protestant. And when all else fails, they hitch themselves to religious issues like abortion and gay rights to win votes, covering up what they will really do with a smoke screen of piety. They have focused in on two small aspects of the Bible to ignore the overwhelming messages of charity and rejecting wealth. When you’ve got Murdoch’s media network to spread the narrative, and the internet to spread the outright lies and conspiracy theories, it gets really easy to control what people think.

The consequences of allowing the Republican agenda to succeed are in our past – the past we don’t teach anymore because we have allowed history to be downgraded. Before unions, we worked in sweatshops where we died from unsafe conditions – fibers in the air crippling our lungs, locked doors that trapped us during fires, mines that collapsed. Before food stamps, our seniors ate cat food and poor children suffered developmental problems because of poor nuitrition. Before Medicaid and Medicare people died because they couldn’t afford simple medical care. Before Roe v. Wade, thousands of women were permanently maimed and died of illegal abortions. Before the Civil Rights movement, not only blacks, but Hispanics, Asians, Jews, anyone considered “different” suffered killings, physical abuse and denial of basic rights. Millions died of influenza in over-crowded tenements. There are real reasons these programs came into being. There are real reasons unions were founded. There are real reasons we took the promise of equality into new laws and new protections. In the world before World War I, that Pollyanna world that is evoked when Tea Party candidates talk about taking our country back, a few people became fabulously rich, a small number became comfortably rich, and the majority lived just one step ahead of starvation, disability, disease, and early deaths. Only one heir of those fabulously rich is still on the 400.

There are 303 million of us who are getting screwed by this agenda. The challenge is to make half of us see the facts and understand just what they are getting if they take back our country – to the 19th century.

 

 

 

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