Progressive Taxation Can Help, but Taxing Wealth is the Ultimate Solution

Needs for infrastructure modernization and hardenings against “ransomware” are stark. Last week’s cyber attack by Russian gang DarkSide shut down Colonial Pipeline’s conduits from Texas to New Jersey, interrupting 2.5 million barrels daily flow of gasoline and other fuels. That’s 45 percent of East Coast supplies, more an annoyance than an obstacle but for predictable panic buying.

Instigated by social media disinformation, people waited in gas lines to fill guzzler SUVs and pickups the way they hoarded toilet paper last year. DarkSide’s stated purpose is capitalistic, not ideological, interested only in extorting money, not “creating unrest.” Evidence Putin or other Russian officials outsourced the disruption hasn’t come to light. But that’s a veil of plausible denial much like Elizabeth I tacitly supporting Francis Drake’s conflicts with the Spanish as a privateer, even claiming New Albion (a.k.a. California) for England. Consumer imprudence will undoubtedly jack-up fuel prices.

The bigger problem, highlighted by DarkSide’s incursion, is the constant risk companies using the internet face. Routinely backing up data, extensive firewall security codes and training employees against phishing scams still hold vital U.S. energy functions above the River Styx. Even decrypted data, once ransom payments are made, don’t guarantee complete, unaltered network functioning thereafter.

Progress, whether addressing climate change, deteriorating infrastructure, or correcting healthcare and other inequalities, is expensive, considerably less so, however, than patchwork repairs and half-measures delayed. The cost of solving society’s problems should be borne by those who can afford to correct them and who’ve benefited most from deferral. Faced with climate change, a pandemic, public works in shambles and other universal threats, relief means the rich, big benefactors of capital investments, must tote the lion’s share. Progressive taxation can help, but taxing wealth itself is the ultimate solution.

The recently enacted American Rescue Plan (ARP) Act and other targeted spending do little to reduce inequality. As economist Thomas Picketty argued in his magnum opus Capital in the Twenty-first Century, privilege too quickly reasserts itself. First exposed to COVID-19 due to international travel and public appearances, corporate and other affluent leaders jetted SARS-CoV-2 to our shores and quickly self-quarantined. Those less able to isolate, blue collar workers and lower income neighborhoods, experienced COVID’s disproportionate spread. Meanwhile, bull markets, propelled by the CARES Act and subsequent federal rescues, added $4.8 trillion to 1-percenters’ coffers. In fact, despite rising death tolls and various lockdowns, America’s wealthiest 1 percent got $7 trillion richer during 2020. By contrast, on average, each percentile of the lower 80 percent of U.S. income earners will get $12 billion of the ARP’s $1.2 trillion 2021 budget. That translates into 1/500th the unearned assets America’s wealthiest plutocrats attained last year.

Senators Bernie Sanders and Elizabeth Warren and the Green Party are right. The answer to funding our infrastructure rebuild, meeting long-term energy needs with Green alternatives to curb global warming, and an equitable, effective utilization of America’s wealth is to impose an annual 2% tax on household assets exceeding $50 million, 3% for assets above $1 billion. We must restore the corporate tax rate to 35 percent, crack down on offshore tax shelters and loopholes, and enact modest transaction fees on financial speculation. Imposing a 45% estate tax on inherited wealth and abolishing subsidies for Big Oil, coal and other harmful industries will also put exploitative systems of unconscionable opulence to everyone’s good use. That’s not socialism. It’s a hedge against America’s underlying oligarchic communism.

Scott Deshefy is a biologist, ecologist and two-time Green Party congressional candidate.

Latest from Scott Deshefy