Reading at the Crossroads

Reading at the Crossroads is an archive for columns and letters which appeared in the Terre Haute Tribune Star. I also blog here when my patience is exhausted by what I feel is irritating, irrational and/or ironic in life. --gary daily

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Location: Terre Haute, Indiana, United States

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Monday, June 14, 2010

The Rich and Taxes: On and On

On the rich and taxes, and in the realm of "you learn something every day, even what you should have already known," here's news of the super rich fighting the income tax in the 1920s and early in the New Deal:

Quote:
". . . the publisher of The Wall Street Journal, Clarence W. Barron, argued that ending Prohibition would enable the government to collect $2 billion a year and abolish the income tax. In 1926, Pierre du Pont’s brother Irénée told an associate that General Motors would save $10 million in corporate taxes each year with the return of the alcohol levies. Irénée’s specific solution — imposition of a 3-cent tax on every glass of beer — would, effectively, make the working poor and the unemployed finance tax relief for the rich. . . .

By 1930, the chemical du Ponts had recruited a roster of other gilt-edged names to their anti-Prohibition cause: automotive Fishers, financial Harrimans, oil Harknesses, rubber Goodriches. Their publicity campaign featured pamphlets like “What Price Prohibition?” (Answer: with the return of legal alcohol, “the necessity of levying income taxes would be eliminated”) and “The Cost of Prohibition and Your Income Tax.” [Daniel Orkent, NYT, 6-13-10]
The rich lead the "deficit crazies"* charge today. The "not and never will be rich" blindly follow their master's lead. Look for the "deficit crazies" to next be telling us that a fair, progressive tax system can be replaced with a New and Improved Lottery game. Or how about a dime sin tax on every long neck bottle of beer?

On the other hand, the rich will lobby and lie to keep the government away from their single malt scotch, the Bombay gin filling their long stemmed martini glasses, and all the wine they've stashed in the cellars of their mansions and multiple vacation "getaways."

We are regularly told these are the perks the rich justly deserve for their business innovations. Right! You know, deep sea oil drilling, derivative financial instruments, another useless and dangerous over the counter drug. And they do throw alms in our direction--the names of the rich and powerful adorn many a stadium and monument.

*"deficit crazies," as best I have been able to find, is a term coined by economists to describe those who sincerely, or as a political smoke screen (for example, Mitch McConnell's "No!" theatrics), reject a needed second stimulus on the grounds that such expenditures will add to the current deficit and the national debt. They term this "craziness" because without an economic stimulus to pull the United States out of the economic hole of the Bush Depression unemployment will remain high, tax revenues low and recovery delayed into a future time no one can come close to predicting. They also see this as "craziness" because now is the perfect time, economically, for a stimulus--interest rates are low and inflation is under control. None of these economist dismiss deficits and debt as not being important. They, however, want America to work its way out of the doldrums, not wait our way out. Too much pain and suffering affecting too many Americans to do nothing about it NOW.

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