U.S. Government: Republic or Plutocracy?

As someone who has taught U.S. government and economics to high school students, I will say firsthand that there is significantly less interest in politics among the youth than in virtually every other conceivable topic.

Topics more interesting to younger Americans include but are not limited to: Sports, music, iPods, movies, video games, Facebook, partying, Lady Gaga, Jersey Shore, Comedy Central, South Park, Adult Swim, etc… (the list goes on and on…).

Now, let me be clear – there are many young Americans who are very interested in our political process and are active in keeping up with the news, even before they graduate from high school.  Unfortunately those students are few and far between, swimming in an ocean of political apathy.  While many so-called education experts do not hesitate to point out our nation’s dismal science and math scores, there is significantly less focus on social studies education.

Today, there are a record number of citizens who claim to be independent voters.  As commentators have noted following last Tuesday’s election results, a majority of independents who voted Obama into office chose to vote against incumbent Democrats.  While Republicans claim this is a sign that voters want less “big government,” it is simply a signal that voters are tired of the party in power.

In 2006, Democrats took control of Congress after voters became disillusioned with Republican policies working for everyday Americans, and in 2008 Senator Obama convincingly won against Senator McCain in the presidential election.  In 2008 McCain ran on the slogan “Country First”, and the PR battle that ensued was between the Republicans’ strategy of using patriotism and denouncing Obama’s ideas versus Obama’s “Yes We Can” strategy of “Hope” and “Change We Can Believe In.”

To anyone following U.S. politics and current events in the past decade, it was not surprising to see Obama win against McCain and his unqualified running mate Sarah Palin.  Today, many Democrats appear to be baffled as to why they lost so many seats in the midterm elections.  After all, didn’t Bush and his Republican-led Congress get us into this mess in the first place?  Paying for two wars with costs well over $1 trillion and enacting tax cuts that mostly benefit the rich at the same time is economic suicide, as most Econ. 101 professors would point out.

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Congressman Sanders’ “No to Oligarchy”

U.S. Senator Bernie Sanders of Vermont

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The American people are hurting. As a result of the greed, recklessness and illegal behavior on Wall Street, millions of Americans have lost their jobs, homes, life savings and their ability to get a higher education. Today, some 22 percent of our children live in poverty, and millions more have become dependent on food stamps for their food.

And while the Great Wall Street Recession has devastated the middle class, the truth is that working families have been experiencing a decline for decades. During the Bush years alone, from 2000-2008, median family income dropped by nearly $2,200 and millions lost their health insurance. Today, because of stagnating wages and higher costs for basic necessities, the average two-wage-earner family has less disposable income than a one-wage-earner family did a generation ago. The average American today is underpaid, overworked and stressed out as to what the future will bring for his or her children. For many, the American dream has become a nightmare.

But, not everybody is hurting. While the middle class disappears and poverty increases the wealthiest people in our country are not only doing extremely well, they are using their wealth and political power to protect and expand their very privileged status at the expense of everyone else. This upper-crust of extremely wealthy families are hell-bent on destroying the democratic vision of a strong middle-class which has made the United States the envy of the world. In its place they are determined to create an oligarchy in which a small number of families control the economic and political life of our country.

The 400 richest families in America, who saw their wealth increase by some $400 billion during the Bush years, have now accumulated $1.27 trillion in wealth. Four hundred families! During the last 15 years, while these enormously rich people became much richer their effective tax rates were slashed almost in half. While the highest paid 400 Americans had an average income of $345 million in 2007, as a result of Bush tax policy they now pay an effective tax rate of 16.6 percent, the lowest on record.

Last year, the top 25 hedge fund managers made a combined $25 billion but because of tax policy their lobbyists helped write, they pay a lower effective tax rate than many teachers, nurses, and police officers. As a result of tax havens in the Cayman Islands, Bermuda and elsewhere, the wealthy and large corporations are evading some $100 billion a year in U.S. taxes. Warren Buffett, one of the richest people on earth, has often commented that he pays a lower effective tax rate than his secretary.

But it’s not just wealthy individuals who grotesquely manipulate the system for their benefit. It’s the multi-national corporations they own and control. In 2009, Exxon Mobil, the most profitable corporation in history made $19 billion in profits and not only paid no federal income tax — they actually received a $156 million refund from the government. In 2005, one out of every four large corporations in the United States paid no federal income taxes while earning $1.1 trillion in revenue.

But, perhaps the most outrageous tax break given to multi-millionaires and billionaires happened this January when the estate tax, established in 1916, was repealed for one year as a result of President Bush’s 2001 tax legislation. This tax applies only to the wealthiest three-tenths of 1 percent of our population. This is what Teddy Roosevelt, a leading proponent of the estate tax, said in 1910. “The absence of effective state, and, especially, national restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power. The prime need is to change the conditions which enable these men to accumulate power which is not for the general welfare that they should hold or exercise…. Therefore, I believe in a … graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate.” And that’s what we’ve had for the last 95 years — until 2010.

Today, not content with huge tax breaks on their income; not content with massive corporate tax loopholes; not content with trade laws enabling them to outsource the jobs of millions of American workers to low-wage countries and not content with tax havens around the world, the ruling elite and their lobbyists are working feverishly to either eliminate the estate tax or substantially lower it. If they are successful at wiping out the estate tax, as they came close to doing in 2006 with every Republican but two voting to do, it would increase the national debt by over $1 trillion during a 10-year period. At a time when we already have a $13 trillion debt, enormous unmet needs and the highest level of wealth inequality in the industrialized world, it is simply obscene to provide more tax breaks to multi-millionaires and billionaires.

That is why I have introduced the Responsible Estate Tax Act (S.3533). This legislation would raise $318 billion over the next decade by establishing a graduated inheritance tax on estates over $3.5 million retroactive to this year. This bill ensures that the wealthiest 0.3 percent of Americans pays their fair share of estate taxes, while making sure that 99.7 percent of Americans never have to pay a dime when they lose a loved one. It also makes certain that the overwhelming majority of family farmers and small businesses never have to pay an estate tax.

This legislation must be passed because, with a $13 trillion national debt and huge unmet needs, we cannot afford more tax breaks for millionaire and billionaire families. But even more importantly, it must be passed because the United States must not become an oligarchy in which a handful of wealthy and powerful families control the destiny of our nation. Too many people, from the inception of this country, have struggled and died to maintain our democratic vision. We owe it to them and to our children to maintain it.

Bernie Sanders is the Independent US Senator from Vermont.

Bernie Sanders, “No to Oligarchy”