Opinion: Is the Opposite of Warren’s “Socialism” an Anti-American, Fraudulent Capitalism?

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Imagine picking up a newspaper, or scrolling through your favorite internet news source, and coming across articles with headlines such as “How to Burglarize Your Neighbor’s Home,” “How to Undermine Public Education for America’s Children,” or “How to Destroy Sidewalks and Streets and Sabotage Other Infrastructure.”

I like to think you’d find that news source rather anti-social, even criminal, in its violent and vandalistic hostility toward our neighbors, our fellow people living in the United States. You might even think this news source must be the publication of some underground fringe group and certainly not mainstream media production.

And yet recently CNBC.com featured a video with the headline “How Married Couples Can Avoid Elizabeth Warren’s Wealth Tax.”

If you think about it, an article instructing people in how, put nicely, to avoid—or, put more bluntly and accurately, downright evade—paying taxes is really not all that different from the articles I invented above. Tax evasion is, of course, a federal crime; and while it might commonly be understood as a crime against the government, it is really, also, a serious and violent crime against the people.

Taxation, properly understood, is the mechanism we have for enabling people to pay their part, their fair share, for the services, projects, and infrastructure of which we all necessarily avail ourselves in the course of our daily lives and most certainly in the conducting of our livelihoods, the business and work we in earning our daily bread and supporting our families.

America, indeed, provides a fertile environment for growing and accumulating wealth. And, undeniably, as Elizabeth Warren has famously pointed out in the past, those who have had the good fortune through their genius, hard work, talent, or just dumb luck to experience great financial success have surely taken advantage of what the nation has provided them in the form of roads, bridges, ports, educated workers, security, military and police protection, and so forth.

While we can argue over what constitutes one’s fair share, we can’t really argue the fact that paying taxes is simply paying the bill for all the services and infrastructure the nation provides for individuals to generate wealth.

Not paying taxes, conversely, is equivalent to taking money from one’s neighbor or helping to destroy the public infrastructure we all need and use. If you avoid or evade paying taxes on the wealth you’ve earned in this nation, then I’m either going to need to pay more to get the same services I’ve been receiving or else those services will be curtailed. The education I receive won’t be as effective; my access to healthcare will be diminished; bridges and roads may crumble; social security benefits may vanish leaving me high and dry in my senior years; and so forth.

Put another way, when people engage in tax evasion they are defaulting on their obligation to support the infrastructure and the cooperative public enterprise, in which we all one way or another participate, that makes all of our lives possible, that keeps us healthy, that educates us, that basically keeps alive.

Hence, evading one’s tax obligations, paying one’s bill, is in fact a violent crime against people. It’s a dine and dash of great magnitude.

And let’s really think about the minimal impact on people’s wallets and substantial benefits for people’s lives in the nation Warren’s proposal, under attack all week on CNBC, would have.

When it comes to the tax bill Warren is proposing, here are the basics: For every dollar in assets people own over $50 million, they pay a 2% tax—or 2 cents per dollar. For every dollar over $1 billion, they pay 3%.

The tax would impact, it is projected, about 75,000 households (less than .1%) and raise $275 trillion over ten years. These revenues would be used to pay for universal child care and pre-K ($700 billion over ten years); free college tuition at public institutions, money for historically Black colleges, and the forgiving of a good portion of student loan debt (together all of this costs $1.25 trillion over ten years); and then she proposes the remaining $750 billion would be down payments on medicare-for-all and the green new deal.

And, let me repeat, this tax impacts less than .1% of households. The benefits seem transformational for our nation’s people, for our nation. And while some dispute whether the tax can really bring in the $275 trillion Warren’s team projects because of tax avoidance schemes, imagine if it brought in even half of what is projected. The good for people’s lives would be tremendous.

And yet on CNBC, the energy and thought go to pondering the legality of schemes for those who own more than $50 million assets to evade the tax.

Robert Frank explains:

The strategy is fairly simple. Warren’s plan would impose a 2% annual tax on wealth over $50 million and a 3% tax on wealth over $1 billion. If a wealthy couple is worth $100 million, they would pay a 2% tax on any wealth over $50 million, which in their case would amount to $1 million a year. But if they divorce and split their fortune in half, they would each be worth $50 million and neither would owe any wealth tax.

And Frank continues, exploring the legality of the strategy:

Accountants to the wealthy add that as long as couples follow the legal process of divorce, the Internal Revenue Service wouldn’t likely challenge the strategy.

“I don’t know of any cases where the IRS has stepped into a legal divorce and challenged it,” said Joseph Perry, tax and services leader for Marcum.

People disparage Warren as a socialist. And yet these tax evasion schemes, the devising of a capitalist mentality, seem to me most dangerous and harmful to Americans.

They seem un-American in their desire to avoid helping other Americans, making American lives possible and better, just by having .1% of households pay a fair share.

Is it just me, or is Warren’s supposed “socialism” as appealing as baseball and apple pie, far more in the vein of the American traditions we like to celebrate than these schemes of the wealthiest capitalists?

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Tim Libretti

Tim Libretti is a professor of U.S. literature and culture at a state university in Chicago. A long-time progressive voice, he has published many academic and journalistic articles on culture, class, race, gender, and politics, for which he has received awards from the Working Class Studies Association, the International Labor Communications Association, the National Federation of Press Women, and the Illinois Woman's Press Association.