What follows here is
an abridgement of an amazing and shockingly perceptive article by former Republican Mike Lofgren that appeared in the August 27, 2012 issue of The American Conservative magazine.
"What I mean by this secession
is a withdrawal into enclaves, an internal immigration, whereby the rich
disconnect themselves from the civic life of the nation and from any concern
about its wellbeing except as a place to extract loot.
Our plutocracy now
lives like the British in colonial India:
in the place and ruling it, but not of
it. If one can afford private security,
public safety is of no concern; if one
owns a Gulfstream jet, crumbling bridges cause less apprehension -- and viable
public transportation doesn't even show up on the radar screen. With private doctors on call and a chartered
plane to get to the Mayo Clinic, why worry about Medicare?
In both world wars,
even a Harvard man or a New York socialite might know the weight of an army
pack. Now the military is for suckers
from the laboring classes whose subprime mortgages you just sliced into CDOs
and sold to gullible investors in order to buy your second Bentley or rustle up
the cash to get Rod Stewart to perform at your birthday party. The sentiment among the super-rich towards
the rest of America is often one of contempt rather than noblesse.
Stephen Schwarzman,
the hedge fund billionaire CEO of the Blackstone Group who hired Rod Stewart
for his $5-million birthday party, believes it is the rabble who are socially
irresponsible. Speaking about low-income
citizens who pay no income tax, he says: "You have to have skin in the game. I'm not saying how much people should do. But we should all be part of the system."
But millions of
Americans who do not pay federal income taxes do pay federal payroll taxes.
These taxes are regressive, and the dirty little secret is that over the
last several decades they have made up an ever greater share of federal
revenues. In 1950, payroll and other
federal retirement contributions constituted 10.9% of all federal revenues. By 2007, the last "normal" economic year
before federal revenues began falling, they made up 33.9%. By contrast, corporate income taxes were 26.4%
of federal revenues in 1950. By 2007
they had fallen to 14.4%. So who has
skin in the game?
While there is plenty
to criticize the incumbent president for, notably his broadening and deepening
of President George W. Bush's extra-constitutional surveillance state, under
President Obama the overall federal tax burden has not been raised, it has been
lowered. Approximately half the deficit
impact of the stimulus bill was the result of tax-cut provisions. The temporary payroll-tax cut and other
miscellaneous tax-cut provisions make up the rest of the cuts we have seen in
the last three and a half years. Yet for
the president's heresy of advocating that billionaires who receive the bulk of
their income from capital gains should pay taxes at the same rate as the rest
of us, Schwarzman said this about Obama:
"It's a war. It's like when Hitler invaded Poland in
1939."
For a hedge-fund
billionaire to defend his extraordinary tax privileges vis-a-vis the rest of
the citizenry in such a manner shows an extraordinary capacity to be
out-of-touch. He lives in a world apart,
psychologically as well as in the flesh.
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