By Pam Martens: February 21, 2019 ~
On Tuesday, Senator Bernie Sanders of Vermont declared his candidacy to seek the Democratic nomination for President of the United States.
Wall Street On Parade endorsed Senator Sanders over Hillary Clinton in 2016 because Clinton was effectively running as Wall Street’s candidate and as Obama’s third term. Unfortunately, eight years of Obama had produced zero criminal prosecutions of the executives of the largest Wall Street banks who had brought the country to its knees as they grew obscenely rich from corrupt, cartel behavior at their banks. Obama also seriously misinformed the American people about how little had changed in terms of reining in the risks on Wall Street. Obama also refused to provide a bully pulpit for breaking up the dangerous Wall Street banks by restoring the Glass-Steagall Act.
Senator Bernie Sanders has, on the other hand, been an unrelenting critic of the dangerous threat that Wall Street banks pose to America since the repeal of the Glass-Steagall Act in 1999, stating repeatedly, and correctly, through his last presidential campaign that “the business model of Wall Street is fraud.” Sanders was right then and he remains right today that these banks must be broken up as a safeguard to the U.S. financial system, the U.S. economy and as a means of preserving democracy in America.
Senator Sanders is a Democratic Socialist. Wall Street On Parade does not support socialism over capitalism. We do, however, believe that unchecked, corrupt crony capitalism in the U.S. has now morphed into an oligarchy that is dangerously threatening the economy and the very future of democracy in the U.S. Thus far, Senator Sanders seems to be the only candidate who is willing to confront this threat head on. For those who are making wild assertions that Senator Sanders could turn the U.S. into a socialist state, it would be well to remember that there are 535 members in Congress with a vote.
On January 31 of this year, Senator Sanders introduced Senate Bill S.309 to expand estate taxes on the super wealthy. In his printed Congressional Record remarks on the legislation (see full text below), he said this:
“From a moral and an economic perspective, our Nation will not thrive when so few people have so much wealth and power and so many people have so little wealth and power. This wealth and income inequality is not only unjust and unfair; the truth is, it is a real threat to our economy and our democracy.”
Other great minds have come to the same conclusion. The late U.S. Supreme Court Justice Louis Brandeis stated: “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”
The threat to America’s economic might from concentrated wealth was brilliantly explained by the late MIT economist, Lester Thurow, who wrote the following:
“Depression is seen as a product of systematic tendencies for the distribution of wealth to become concentrated among a few. When this happens, demand eventually sags relative to supply and long cyclical downturns commence…
“Essentially, the economic problem is like that of the wolf and the caribou. If the wolves eat all the caribou, the wolves also vanish. Conversely, if the wolves vanish, the caribou for a time multiply but eventually their numbers become too great and they die for lack of food. Producers need consumers, and if producers deprive workers of their fair share of production income they essentially deprive themselves of the affluent consumers they need to make their facilities profitable….”
Keeping Thurow’s analogy in mind, we encourage our readers to take the time to read Senator Sanders’ full remarks below that appeared in the Congressional Record relating to his introduction of estate tax legislation and the unprecedented wealth concentration that exists today in our nation.
Mr. Sanders: Mr. President, all across our country–in Vermont, in Illinois, in California–all across this country, people are asking a very simple question. That question is: How does it happen that in the midst of the extraordinary wealth that exists in our country–how does it happen that so many people continue to hurt financially and struggle desperately to keep their heads above water economically?
Today, despite unemployment being relatively low, some 40 million Americans continue to live in poverty. We don’t talk about poverty very much here in the Senate, but we have 40 million Americans living in poverty. Many of them are struggling to adequately feed their kids. Many of them are forced to go, despite working, to emergency food shelters just to stay alive.
Despite the United States having a GDP–gross domestic product–of more than $20 trillion, we in this country embarrassingly continue to have the highest rate of childhood poverty of almost any major country on Earth. We don’t talk about that either. Children are obviously the future of America, and we continue to have one of the highest rates of childhood poverty of any major country, and that includes 29 percent of African-American children who live in poverty.
How does it happen that in a so-called booming economy–and we hear from President Trump every other day about how the economy is booming–the bottom 40 percent of our population does not have $400 in cash in order to address a financial emergency? Think about that. The bottom 40 percent–almost half of Americans–don’t have $400 in their pocket, in the bank to address a financial emergency. Maybe the car breaks down, maybe the kid gets sick, maybe one loses one’s job, maybe one undergoes a divorce; something happens, and 40 percent of the American people don’t have $400 in the bank to address that crisis.
In other words, today–and we saw this in the recent government shutdown; today in America, many, many millions of families live paycheck to paycheck in order to survive. That should not be happening in the wealthiest country on Earth, and it is time we begin to talk about that. It is not good enough to talk about a so-called booming economy, forgetting about tens of millions of families who are not seeing that booming economy but, in fact, are living under incredible financial stress.
How does it happen that, in the so-called booming economy, tens of millions of American workers today are working for wages that are so low they cannot afford the escalating cost of housing? Some of them are spending 40, 50 percent of their limited incomes on housing. For many of these people, there is no health insurance available; the idea of a vacation for the family is something not even to be thought about; and the idea of being able to send one’s kids to college is something that is also not on the table. By the way, many of these individuals are working two or three jobs, 50, 60, 70 hours a week, just to survive.
This, again, is the wealthiest country in the history of the world. Yet 30 million Americans today, as we speak, have zero health insurance–no health insurance at all; 41 million people are underinsured–which means their deductibles and their copayments are so high that even though they have insurance, they still can’t afford to go to the doctor, and one out of five Americans today cannot afford the prescription drugs their doctors prescribe.
In my view–a view I have held for a very, very long time, and it is a view shared by people not only in this country in wide numbers, but all over the world–healthcare is a human right, not a privilege.
Whether you are rich or whether you are poor, you have the right to go to a doctor when you get sick, and you have the right to know that if you end up in a hospital, you are not going to go bankrupt or suffer from financial distress.
We are an aging population–no great secret there. We are an aging population. In this Congress, instead of dealing with government shutdowns precipitated by the President, we should be talking about how we respond to the reality of an aging population. Yet what we don’t talk about is that about half of older Americans–half of older Americans, those 55 and older–have no retirement savings and no idea about how they will retire with dignity.
Think about what that means. Somebody is 60 years of age, they are coming to the end of their work-life, and they have no money–or virtually no money–in the bank. Maybe all they are going to get is Social Security. They turn on the TV, and they hear folks around here talking about cutting Social Security. Talk about why people in this country are angry and why they are stressed out.
Here is the bottom line. We are the wealthiest country on Earth. In fact, we are the wealthiest country in the history of the world, but despite that wealth, a significant percentage of our population–our children, our elderly people, our working men and women–struggle each and every day to keep their heads above water economically. Not only are they struggling, I think the pain they are feeling has to do with the worry they have about the future for their kids because they know, as many of us know, that unless we make some bold changes in our economy, the younger generation today will have a lower standard of living than their parents.
Imagine that–a so-called booming economy, yet we are looking at a situation where the younger generation may well have a lower standard of living than their parents.
I want to also say a word about another reality that currently exists. While so many of our people are struggling, while so many of our children are living in poverty, while 20 percent of folks on Social Security are trying to live on less than $13,000 a year, there is another pervasive reality in American society today; that is, the people on top–the very wealthiest people in this country–have never had it better, and the gap between the very, very rich–I am not just talking about the rich; I am talking about the very, very rich–is growing wider.
Here is the simple truth, a truth that we virtually never talk about here in the Senate, a truth that is not heard much in the corporate media; that is, the United States of America today has the most unequal distribution of wealth and income of almost any major country on Earth, and that level of inequality is worse today than at any time since the 1920s, the so-called Gilded Age of American society.
Today, if you can believe it, the three wealthiest people in this country–three–own more wealth than the bottom half of America, 160 million people. Let me repeat that. The three wealthiest people in this country own more wealth than the bottom half of America, 160 million people. Today, the top one-tenth of 1 percent–not 1 percent; one-tenth of 1 percent–own almost as much wealth as the bottom 90 percent.
Today, and since the Wall Street crash in 2008, about 46 percent of all new income goes to the top 1 percent. Roughly speaking, half of all new income goes to the bottom 99 percent, and half goes to the top 1 percent, and our great task here in the U.S. Senate is to keep the government open while Trump tries to shut it down. Maybe, just maybe, we should be talking about those issues. Maybe, just maybe, we should be talking about an economy that works for all of us, not just the people on top.
Today, the top 25 hedge fund managers on Wall Street–25 hedge fund managers–earn nearly double the income of all 140,000 kindergarten teachers in America. What all of the psychologists tell us is that the most important years of a human being’s development are 0 to 4. Those are the most impressionable years in terms of how we develop intellectually and emotionally, and our childcare workers, our kindergarten teachers play a very important role. Does anybody think it makes sense that you have 25 hedge fund managers on Wall Street who, today, earn nearly double what 140,000 of our kindergarten teachers make? By the way, public teachers in America are falling further and further behind other occupations.
Having stated that reality–the fact that the middle class is struggling and the fact that the people on top are doing phenomenally well–I think it is fair to ask what the views are of the Republican leadership here in the Senate–Republicans control the Senate–and what our Republican President, President Trump, is proposing to address these massive levels of injustice and inequality. Three people own more wealth than the bottom half of America. What does the President and what does Leader McConnell have to say about that? The sad truth is that the Republican leadership today wants to make an embarrassingly bad situation even worse.
After passing a $1 trillion tax giveaway for the top 1 percent and large corporations last year, Republican leadership is coming back and saying: Hey, we only gave 83 percent of the tax benefits to the 1 percent. That is not good enough. That is not good enough. We have to do even better for our billionaires and corporate sponsors.
This time, the Republican leadership and the President want a tax break of hundreds of billions of dollars that would go exclusively to the wealthiest of the wealthy. I am not talking about the wealthy; I am talking about the wealthiest of the wealthy–the top one-tenth of 1 percent, the wealthiest 1,700 families in America.
We have 127 million families in our country–a population of some 320 million people. As I have indicated, many of these families are struggling. Many of these families are hurting. Today, many of these families are wondering how they are going to pay their rent, pay their mortgage, keep their lights on. Yet the legislation to repeal the estate tax that Senator McConnell and President Trump are proposing would benefit less than the top one-tenth of 1 percent of them–99.9 percent would see no tax reduction from the legislation.
Can anyone actually imagine bringing forward a piece of legislation that does not help the bottom 99.9 percent? Can you imagine that? The middle class are struggling. The gap between the rich and the poor is growing wider. There are 30 million people without health insurance. Our infrastructure is crumbling. And they come forward with a piece of legislation that is designed to protect and benefit the top one-tenth of 1 percent. The legislation would be of no benefit to 99.9 percent of the people of this country.
I think it is clear that when the people of this country look at Congress and say ‘Those folks in Washington are not representing me. They are representing their wealthy campaign contributors. They are representing the billionaire class,’ there can be no clearer example of that reality than this proposed legislation.
Once again, with all of the economic problems, all of the inequality we face, imagine legislation that comes forward from the Republican leadership and the President that benefits the top one-tenth of 1 percent–the 1,700 wealthiest families in this country.
It is no secret that our infrastructure–our roads and our bridges, water systems, airports, wastewater plants–is crumbling all over this country. All over this country, there are major infrastructural problems. But I hear over and over again: We don’t have the funding to rebuild our crumbling infrastructure and put millions of Americans to work at good-paying jobs rebuilding that infrastructure. We just don’t have the money.
Our schoolteachers are underpaid, but we don’t have the money to provide attractive salaries in order to get the best and the brightest to do the most important work in this country; that is, teaching our young people.
Today, we have veterans–people who put their lives on the line–sleeping on the streets, but we don’t have the money to house them.
Families in America cannot afford childcare, and public schools are underfunded. We don’t have the money to address those crises, but somehow we do have hundreds of billions of dollars available to provide tax breaks for the top one-tenth of 1 percent.
We apparently have enough money to provide the Walton family–the wealthiest family in America, the folks who own Walmart, the people who pay their own employees starvation wages–by repealing the estate tax, as Senator McConnell and President Trump would like to do, we have enough money to provide the Walton family, the wealthiest family in America, with a tax break of up to $63 billion. Veterans sleep out on the street, teachers are underpaid, and 30 million Americans have no health insurance. We can’t address those issues, but we do have legislation that would provide up to $63 billion in tax breaks for one family.
We have, apparently, enough money available to provide the Koch brothers–a family who spent some $400 million during the midterm election to help elect Republican candidates; the Koch brothers, one of the wealthiest, most politically active families in America–we have enough money to provide them with up to a $39 billion tax break.
Under this legislation, we can provide a tax break of up to $27 billion to the Mars candy bar family and up to a $13.4 billion tax break to the Cox cable family.
In other words, at a time of massive needs in this country, we don’t have enough money available to protect working families and the middle class, but we certainly have more money than we know what to do with in order to give incredible tax breaks to the richest people in this country.
The estate tax that we are going to be proposing does not give massive tax breaks to the wealthiest people in this country–quite the contrary. It says to those people that at a time of massive income and wealth inequality, instead of repealing the estate tax, we must substantially increase this tax on the multimillionaires and billionaires of this country and in doing that, not only come up with much needed revenue to address the needs of working families but also to reduce wealth inequality in America.
That is why this week I will be introducing legislation for an estate tax bill that would do exactly the opposite of what my Republican colleagues propose to do. Let me briefly explain what is in the legislation I am offering.
Under my bill, anytime someone inherits an estate in America of $3.5 million or less, that person will not pay one penny in estate taxes. They will get to keep that inheritance tax-free. That population includes 99.8 percent of the American people. The legislation I am proposing would not raise taxes by a penny on 99.8 percent of the American population.
If you are in the top two-tenths of 1 percent of the population–the population that inherits over $3.5 million–your taxes will, in fact, be going up, and they should be going up.
My legislation establishes a 45-percent tax on the value of an estate between $3.5 million and $10 million, a 50-percent tax on the value of an estate between $10 million and $50 million, a 55-percent tax on the value of an estate in excess of $50 million, and a 77-percent tax on the value of an estate above $1 billion. In other words, this bill begins to create a progressive tax system in America, which is based on ability to pay.
I know some may think otherwise, but the truth is, this is not a radical idea. From 1941 through 1976, the top estate tax rate was, in fact, 77 percent on estate values above $50 million. Back to 1976, the top estate tax rate was 77 percent.
This bill would also close tax loopholes that have allowed billionaire families, such as the Waltons, to pass fortunes from one generation to the next without paying their fair share of taxes. Under this legislation, the families of all 588 billionaires in our country, who have a combined net worth of over $3 trillion, would pay up to $2.2 trillion in estate taxes.
Let me make a confession here. This idea, this approach, was not developed by Bernie Sanders. It is not a new idea. More than a century ago, a good Republican President named Teddy Roosevelt fought for the creation of a progressive estate tax to reduce the enormous concentration of wealth that existed during the Gilded Age.
What is really quite remarkable is that what Teddy Roosevelt talked about over 100 years ago during the Gilded Age of the 1920s, when little children were working in factories and fields and the wealthiest people were enjoying incredible wealth and luxury–the idea Teddy Roosevelt proposed then is as relevant today as it was back then. Let me quote what Teddy Roosevelt said more than 100 years ago:
‘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. 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.’
That was Teddy Roosevelt over 100 years ago. What Roosevelt said then is absolutely true for today. From a moral and an economic perspective, our Nation will not thrive when so few people have so much wealth and power and so many people have so little wealth and power. This wealth and income inequality is not only unjust and unfair; the truth is, it is a real threat to our economy and our democracy.
We need a tax system in this country that tells the billionaire class that they are going to have to pay their fair share of taxes so that we do not have 30 million people without health insurance, so that we do not have young people graduating college $50,000, $100,000 in debt, so that we do not have an infrastructure that is crumbling, and so that we do not see our great country moving toward an oligarchic form of society where a handful of families enjoy incredible wealth and power at the expense of everybody else.
In my view, the fairest way to reduce wealth inequality, to invest in the middle class and working families of our country, and to preserve our democracy is to enact a progressive estate tax on the inherited wealth of multimillionaires and billionaires. That is exactly what I will be proposing.