What Would Jefferson Do? -Income Redistribution- by Pinko the Bear

Dec11

In a perfect world, an ideal world, everyone would have equal access to the necessary resources they need to survive. But as it always happens, people do not have equal access to the resources they must have to survive. Food, water, shelter, utilities, education, health care and any other number of resources are denied to the superfluous populations of the various nations of this planet. People continually starve, suffer and die because somehow, some way, some people got the notion into their heads that it is okay to deny these life sustaining resources to others just because the “others”, the superfluous ones,  don’t have enough money to pay for the resources that are controlled by deniers. This is the reality we face. This is not the way it has to be. It really is just a matter of force and choice.
Thomas Jefferson witnessed first hand what bad choices by greedy men can spawn. The bloody French Revolution was the result of greed. The Haves wanted more and more and the Have Nots got less and less. It resulted in a populous so oppressed, so denied, pushed so far, that when a Tipping Point was reached, the people rose up slaughtered tens of thousands of oppressors, friends of oppressors and countless innocents. This did not have to happen. Jefferson knew it. Jefferson wrote about this very issue in a letter to Madison. He was very interested in preventing the kind of obscene income inequality he saw in France from happening here in America. He knew it would take many generations before enough aggregated wealth could start to buy off the Government. He knew that once obscene amounts of generational wealth accumulated at the top, it was only a matter of time before that wealth would infect, corrupt and literally purchase those controlling the  levers of power. He warned us. Well, more rightly, his letters to Madison warned us.

The property of this country is absolutely concentrated in a very few hands, having revenues of from half a million of guineas a year downwards. These employ the flower of the country as servants, some ofthem having as many as 200 domestics, not laboring.

They employ also a great number of manufacturers and tradesmen, and lastly the class of laboring husbandmen. But after all there comes the most numerous of all classes, that is, the poor who cannot find work.

Whenever there are in any country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labor and live on. If for the encouragement of industry we allow it to be appropriated, we must take care that other employment be provided to those excluded from the appropriation. If we do not, the fundamental right to labor the earth returns to the unemployed.

So the question  was and still is, “How do we maintain some equality without too much Government intrusion?” Jefferson was opposed to hierarchy and aristocracy and  he tried to address it in Virginia through a series of laws  he passed that ended some of the old practices of the aristocratic class. When land passed from generation to generation, the eldest boy inherit it all. This was stopped by Jefferson in Virginia. This was a start, but it really didn’t solve the broader issue and didn’t catch on in the other colonies. But it was start. Years later, while serving as a diplomat to France, and witnessing the horrid conditions under which the majority of the people suffered under,  he realized that it was the  profound distortion in  the distribution of wealth that led to the French Revolution. As a solution he proposed a “geometric” tax solution should be instituted. As one’s income rises, the percentage of income that is taxed should rise “Geometrically” he said. In other words, he proposed a  Progressive tax system that says as your income gets higher, you pay a higher percentage. As it gets stratospherically high the tax gets “confiscatory”.

Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions or property in geometrical progression as they rise.

He was not saying that people should be punished for their hard work or that they should have their earned wealth taken from them. He was saying that we need to  devise a system that will prevent the kind of income inequality that caused the French Revolution. He said we will need a system that will keep that kind of bloody uprising from happening here in America sometime down the road. He was right. It is kind of interesting that this man was thinking about these thing over 100 years before the personal income tax system was put into place. It is more than interesting. It was brilliant. Too bad we did not heed his advice. I don’t want to go through all the details and numbers about the marginal tax rates again here since I have beat it to death in other posts and radio shows. Just know this. The reason we should have what Jefferson called “confiscatory” tax rates for the obscenely high income earners is because the Republic is at risk when gross amounts of Capital aggregates in the hands of a few people. Income inequality is the greatest threat to a functioning democratic society. No government can stand in the face of this obscene kind of wealth at the top. Jefferson knew, I know and now you know it. Others have known it. Under Eisenhower we had top marginal rates in the low 90s. They stayed high until the late 70s and early 80s and have been forever going down. The rich truly get richer and the poor truly get poorer.
This is our current reality but it  isn’t the only reality possible. There is nothing natural about this. There is nothing inevitable about this. This is not simply the normal progression of mankind. This is a choice that was made by folks who at one time used force to gain some power. Each time these marginally more powerful people gained a bit more power, they gamed the system a bit more. More power led to more gaming of the system. Even more power led to even more gaming of the system. Absolute power is their goal. How will you fare under that kind of gamed system?
The French Revolution didn’t have to be so bloody. The Russian Revolution didn’t have to be so bloody. There comes a tipping point in every society that forever changes that society. People will always do what they have to do to survive. They will do what they have to do to feed their families. Self preservation is in our DNA. The masses of oppressed people in any society will do what has to be done in order to live. Jefferson’s proposal to institute a progressive tax system which exempted the poor and then got progressively higher seems like a fine idea to me considering the certainty of mankind’s will to survive and its demonstrated ability to do so. The rise of the oligarchy is a result of a populous that was asleep or inept for too many generations. Instituting a tax policy that prevents gross amounts of  generational wealth to be passed and accumulated seems like a perfectly rational, logical and reasonable tool to be used to prevent the corrupting power of obscene wealth. The tipping point won’t come if the people can eat, clothe and shelter themselves. Our society is inching its way to that point. I concur with Jefferson. Do you?