America’s Auto Workers: On Strike Against Inequality. Again.
UAW activists years ago helped usher in a vastly more equal society. Can history repeat?
Win McNamee/Getty Images
Ever bargain with an auto dealer over the price of a car? Most of us have, at one time or another. We know how the drill works. The car has a sticker price. We want a lower price. So we haggle. Sometimes the dealer doesn’t budge. More typically, dealer and buyer agree on a price somewhere between what the dealer demands and the buyer desires.
Humans have been haggling like this, compromising like this, ever since time immemorial. This bargaining back-and-forth almost seems hard-wired into our human DNA.
But plutocracies like the contemporary United States are rewiring that historic human code. The rich who dominate politics in these plutocracies are altering humankind’s age-old bargaining dynamics — and right on America’s grandest political stage! On that stage, in the Capitol building where America’s lawmakers meet, House and Senate Republicans have just concluded a history-defying round of “bargaining” on the GOP tax legislation.
Why did these lawmakers need to bargain? Earlier this fall, the Republican majority in the U.S. House of Representatives passed a version of that tax legislation that gave America’s rich and the corporations they run over $1 trillion in tax breaks. Earlier this month, the Republican majority in the Senate passed a different version of the same legislation, with its own mammoth set of tax breaks for America’s wealthy and their corporations.
Nothing particularly unusual here. The House and Senate regularly pass different versions of the same basic legislation. They then come together in a “conference committee” to bargain out the differences. These “conference committee” bargaining sessions do what human bargaining has always done. They arrive at a point somewhere between the House position and the Senate position.
Lawmakers in a plutocracy like ours don’t bargain with each other. They bargain with the rich. And plutocracy leaves those rich insatiable. They can never have enough.
Capitol Hill observers, naturally, expected the same process to play out on the tax bill. The House and Senate conferees, everyone expected, would come up with a compromise somewhere between the House and Senate positions. The conferees did no such thing. They simply bargained themselves to an even better position — for America’s rich.
On provision after provision, the House-Senate conference committee has given away to the rich more than either the House or the Senate originally voted.
The most glaring example of this new giveaway: the “compromise” the conference committee “bargained” on the U.S. tax code’s top marginal tax rate.
Under current law, a couple filing jointly will pay taxes on ordinary income over $480,050 at a 39.6 percent rate. The legislation the Senate passed cut that top rate to 38.5 percent on income over $1 million. The House version of the tax legislation kept the rate at 39.6 percent, also on income over $1 million, and added a “bubble” surcharge that bumped that rate a bit over 40 percent on million-plus incomes.
Human haggling, as traditionally practiced, would end up with a top marginal rate provision somewhere between these two positions — say, for instance, a 39 percent top rate.
But traditional bargaining processes simply do not apply in American politics today. Lawmakers in a plutocracy like ours don’t bargain with each other. They bargain with the rich. And plutocracy leaves those rich insatiable. They can never have enough. They always want more.
During the conference committee deliberations on the GOP tax plan, the Washington Post reports, America’s wealthy — the political campaign “donor class” — “demanded” an even greater top marginal tax rate giveaway than either the House or the Senate had individually legislated.
And the Republican House and Senate conferees obliged. They came up with a “compromise” that lowers the top marginal tax rate to 37 percent.
What will this lower tax rate mean for America’s richest? A Business Insider analyst has run the numbers. The House-passed tax plan saves a taxpayer reporting $10 million in income an estimated $116,972. The Senate-passed legislation saves this same taxpayer $222,004.
Classic bargaining 101 theory would put the tax savings for our mega-millionaire taxpayer in the House-Senate conference committee compromise at some point between $116,972 and $222,004.
The actual tax savings the conference committee has “bargained” for our well-heeled taxpayer: $361,435!
Don’t you wish you could benefit from “compromises” like that? In the House-Senate conference committee tax plan, you — if you happen to reside in the 99 percent — most certainly do not. You get less out of this new package, not more.
We need a new package. Even better, how about an end to plutocracy?
Sam Pizzigati co-edits Inequality.org. His latest book: The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970.
by Sam Pizzigati
UAW activists years ago helped usher in a vastly more equal society. Can history repeat?
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