Category Archives: Theodore Roosevelt

Why Have DFL Progressives Stopped Pushing For Progressive Tax Reform?

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Every year, we hear the State Legislature endlessly debate “water cooler” issues, such as Sunday liquor sales and legislator pay. Meanwhile, we hear almost nothing about more fundamental issues of governance, such as whether we have a taxation system that treats Minnesotans fairly.

When you look at Minnesotans’ effective state and local tax rate — the proportion of income paid in combined state and local taxes – it’s clear that we don’t have a progressive system. That is, we don’t a tax system where the rate of taxation increases, or “progresses,” as income increases.  This chart based on Minnesota Department of Revenue data paints a pretty clear picture:

Note: Department of Revenue study authors point out that “effective tax rates in the 1st decile are overstated by an unknown but possibly significant amount.” If you want to know why, there’s an explanation on page seventeen of the study.

However, even disregarding that first bar for the purposes of this discussion, we can certainly say that Minnesota has a state and local tax system that is not very progressive. That is, it is not taxing Minnesotans according to relative ability to pay.

As you can see in this chart, local taxes in Minnesota are particularly regressive.   Compared to other income groups, the wealthiest Minnesotans are paying the smallest share of their income in local taxes.  So if state lawmakers want tax fairness for Minnesotans, and they can’t rely on local officials to reform local taxes, then they need state taxes to be more progressive to offset those regressive local taxes.

Before my conservative friends trot out their tired old “socialism” rhetoric, they should read the words of Adam Smith, the father of free market economic theory who conservatives worship, on the subject of progressive taxation:

“The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess … It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.”

Republicans should also keep in mind that the nation’s first progressive income tax was enacted when the revered father of the Republican Party, Abraham Lincoln signed the Revenue Act of 1862.  A few decades later, Teddy Roosevelt carried on this Republican tradition when he strongly advocated for progressive taxation:

I believe in a graduated income tax on big fortunes, and in . . . a graduated inheritance tax on big fortunes, . . . increasing rapidly in amount with the size of the estate.

The fact is, until relatively recently Republicans were comfortable with much higher top income tax rates than they are today. While the top rate under Democratic Presidents Obama and Clinton was 40%, the top rates were 91% under Republican President Eisenhower, 70% under Republican President Nixon and 70% under Republican President Ford.

So, to my right wing friends, you’re embarrassing yourselves when you call progressive taxation “Marxism.”  For more than a century, progressive taxation was mainstream Republican thought.  Don’t let the uber-wealthy interests who seized control of the Republican Party in more recent years blind you to that fact.

To my friends in the center, spare me the “be reasonable” lectures you deliver every time progressive taxation is proposed.  Unless moderates also view Presidents Eisenhower, Nixon and Ford as wild-eyed extremists, you need to stop characterizing progressive taxation proposals as being somehow “radical.”

Finally, to my progressive friends, show some courage and leadership.  Don’t get so obsessed with shiny objects, like the Sunday liquor sales issue.  Don’t shy away from fighting to make our state and local taxation system more fair.  It’s time for DFLers who are “progressives” in name to become more progressive when it comes to substance.

Sanders Drawing Wrong Parallels To Explain Democratic Socialism

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Cursor_and_Denmark_flag_-_Google_SearchWhen presidential candidate Bernie Sanders explains why Americans shouldn’t fear his “democratic socialism,” he usually points to Scandinavia.

“I think we should look to countries like Denmark, like Sweden and Norway, and learn what they have accomplished for their working people. In Denmark, there is a very different understanding of what “freedom” means… they have gone a long way to ending the enormous anxieties that comes with economic insecurity. Instead of promoting a system which allows a few to have enormous wealth, they have developed a system which guarantees a strong minimal standard of living to all — including the children, the elderly and the disabled.”

His opponent, Senator Hillary Clinton, who clearly understands American exceptionalism biases, quickly shuts down Sanders’ arguments with a smug shrug: “We are not Denmark.”

By continually citing countries other than America to explain democratic socialism to Americans, Senator Sanders is hurting his case. Instead of pointing to Norway, he should more consistently cite the New Deal.

First, let’s consider the definition of “democratic socialism” offered by Democratic Socialist’s of America:

“Democratic socialists believe that both the economy and society should be run democratically—to meet public needs, not to make profits for a few. To achieve a more just society, many structures of our government and economy must be radically transformed through greater economic and social democracy so that ordinary Americans can participate in the many decisions that affect our lives.”

Truth be told, the United States of America is no stranger to this kind of democratic socialism. It was brought to us during some of the most successful and popular presidencies of the past century. Teddy Roosevelt, Franklin Roosevelt, Harry Truman, and Dwight Eisenhower enacted a whole series of popular measures that fit under this definition of democratic socialism.  At the time their ideas were proposed, they were criticized as infeasible, un-American and socialistic, just as Sanders’ ideas are today.

Therefore, Senator Sanders should be explaining his democratic socialism with American examples that a large majority of Americans already know and love. Sanders might say something like this:

You want to know what democratic socialism is? When the great Republican Teddy Roosevelt dissolved 44 corporations to protect the middle class, and when he protected ordinary Americans from the railroad companies and other big corporations, his critics said “you can’t pass that, because it’s socialism.”  But he passed them anyway, because the American people demanded it.

When the enormously popular Franklin Roosevelt used government funding to put Americans to work building community infrastructure, they said “you can’t pass that, because it’s socialism.” When FDR proposed a Social Security system of government-run pensions that lifted millions of American seniors out of poverty, conservatives said “you can’t pass that, because it’s socialism.”  But he passed those things anyway, because the people demanded it.

When Harry Truman enacted Medicare, people like Ronald Reagan called that socialism too.

And you know what? When Republican Dwight Eisenhower invested in an enormously expensive interstate highway system and had 90% income tax rates on the ultra-wealthy, they said it again: “You can’t pass that, because that’s socialism.”  But he passed those things anyway, because the American people demanded it.

And despite the dire predictions from critics, America’s economy prospered under these policies that were all predicted to be catastrophic for the economy.

So in 2016, when the defeatist “no you can’t” crowd tells Americans “you can’t pass bills to provide higher education and health care to all, because that’s socialism,” I get my inspiration and courage from Teddy, FDR, Give ‘em hell Harry and Ike.  Because of them, I know America can overcome the cynics’ name-calling and naysaying to do great things for the middle class now, just as we did then.”

Democratic socialism is already in America, and it is enormously popular. Surveys consistently show that Americans are vehemently opposed to cutting or eliminating democratic socialist programs such as Medicare, Social Security, and the minimum wage.

Americans not only have embraced democratic socialism in the past, they strongly support it for the future. A recent GBA Strategies poll shows that likely 2016 voters overwhelmingly support a whole range of Sanders’ ideas being dismissed as socialist ideas lacking sufficient political support:  Allowing governments to negotiate drug prices has 79% support. Medicare buy-in for all has 71% support. A $400 million infrastructure jobs program has 71% support. Debt-free college at all public universities has 71% support. Expanding Social Security benefits has 70% support. Taxing the rich at a 50% rate — the rate under conservative icon Ronald Reagan — has 59% support, and only 25% in opposition. Breaking up the big banks has 55% support, and only 23% in opposition.

This is hardly a portrait of a nation that opposes democratic socialism.  Overwhelming support for democratic socialism is already there, ready to fuel a 2016 presidential candidate.  But for two reasons, Senator Sanders needs to cite American parallels to explain his approach, not European.

First, citing examples of American policies will help build confidence that bold measures can be enacted over fierce opposition now, just as they were in the days of Teddy, FDR, Truman and Ike.  Second, citing American examples will paint Sanders’ democratic socialism label and his policy ideas red, white and blue, rather than just red.  It will show that such ideas have been embraced in the past by idolized Republicans and Democrats.  It subsequently will normalize democratic socialism.

Americans are in a very nationalistic, ethnocentric and nostalgic mood. So, rather than continually pointing to the Rikstag, Storting, and Folketing to explain democratic socialsm, Sanders needs to point to the faces on Mt. Rushmore.

Note:  This post was chosen for re-publication in MinnPost’s Blog Cabin feature.