By Tomiwa Adeyemo, Staff Writer
The American dream is the concept, or national ethos that says that no matter where you come from or who you are, if you work hard and take advantages of the opportunities available here, you can achieve your dreams and one day find yourself at the top. There’s just one problem: with a global backlash against the rich and elite, the top has increasingly become an unpopular place to be.
I began to realize this when, after the 2016 election, I read article after article from various news sites all offering up opinion pieces and analysis about why Trump had won. A majority of these sites acknowledged a key factor: the global backlash against the elites. However, while significant, this is just a single factor in what I would consider a far greater issue that has been well documented: inequality. Inequality is one of the major factors that drives the backlash and as the population has realized this, there has been a host of proposals to attempt to rectify it. The most common ones at the moment are from 2020 democratic candidate Elizabeth Warren and another from freshman rep Alexandria Ocasio-Cortez (AOC).
AOC’s proposal is to raise the marginal income tax rate to 70% on families that make more than $10 million a year. Warren’s proposal would be an annual tax of 2 percent on a family’s wealth between $50 million and $1 billion, and a 3 percent tax on household net worth that exceeds $1 billion. The 2020 candidate field is still fleshing out so there’s no doubt we’ll see a host of other similar proposals, some more moderate and some further left, as candidates hope to play to the democratic base. Despite this, the support for “soaking the rich” through these proposals is not just limited to the left as a POLITICO/Morning consult poll shows. 76% of registered voters believe the richest Americans should pay more in taxes. I personally believe a 70% tax rate is too high and could lead to an exodus of wealthy individuals, but my purpose here is not to analyze the pros and cons of such a tax rate, but to remind people that there is a more straightforward and less draconian way to tackle inequality: addressing the issue of tax avoidance.
Courtesey of Adam Smith Institute
Tax avoidance was once a monumental issue. It’s been well documented that due to loophole after loophole, most wealthy individuals do not pay their fair share of taxes. The 2016 leak of the Panama papers of Mossack Fonseca, a Panamanian law firm proved that there is an underground financial industry dedicated to helping the rich and wealthy avoid taxes and quite possibly commit fraud. Some of the prominent names included in the leak were the wife of Iceland’s then Prime Minister Sigmundur Gunnlaugsson, father of then British Prime Minister David Cameron, friends of Russian president Vladimir Putin and a host of other recognizable names. Thus, I believe that radical proposal after radical proposal can be put forth, but without ensuring that the wealthy pay their fair share of taxes enacting such proposals would be a waste of time. I would say it’s akin to pouring water in a bucket that has a hole and deciding to increase the size of the bucket while ignoring the hole. The sooner we begin to address inequality the better.
The issue of inequality is not a burden that should be borne by the masses alone but also by those at the very top. The reason for this is simple: it is in their best interest to do so. Throughout history, some of the most violent revolutions have been sparked by pervasive inequality. Walter Scheidel, Stanford Professor and author of the book “The Great Leveler” argues that over the course of history, inequality has only been addressed in one of four ways: revolution, state collapse, plague & warfare. It’s not a stretch to say any of these could happen at any point.
Plague: The rise of an anti-vaccination movement has led to a measles outbreak in the Philippines that ended 70 lives and closer to home, the CDC has said there are more than 100 cases across 10 states.
Warfare/State Collapse: The political divide between the left and right has evolved from a gap to a chasm that has seen violent protests and clashes facilitated by radical groups like the white supremacists in Charlottesville, Antifa & the Proud Boys (among many others). The left and right often no longer agree on the same facts and switching between CNN and Fox News is like hopping from one reality to another. The Russian interference in the 2016 elections shook the very core of America’s democracy and proved that its not as stable as many would like to believe.
Revolution: A small but loud section of the far left has began pushing the idea that to have more than another person automatically means you are an “oppressor.” They use this presupposition to argue for the radical approach of equality of outcome rather than the more logical process of equality of opportunity. While this is a small minority of the left, if inequality continues to widen, more and more people would be drawn to the idea and it does not take very long before the “oppressed” decide to rise against their oppressors.