Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
21 September 12
t's
not just his giant income or the low tax rates he pays on it. And it's
not just the videotape of him berating almost half of America, or his
endless gaffes, or his regressive budget policies.
It's something that unites all of this, and connects
it to the biggest underlying problem America faces - the unprecedented
concentration of wealth and power at the very top that's undermining our
economy and destroying our democracy.
Romney just released his 2011 tax returns, showing he
paid $1.9 million in taxes on more than $13 million of income last year -
for an effective tax rate of 14.1 percent. (He released his 2010 return
in January, showing he paid an effective tax rate of 13.9 percent.)
American has had hugely wealthy presidents before -
think of Teddy Roosevelt and his distant cousin, Franklin D. Roosevelt;
or John F. Kennedy, beneficiary of father Joe's fortune.
But here's the difference. These men were champions of
the working class and the poor, and were considered traitors to their
own class. Teddy Roosevelt railed against the "malefactors of great
wealth," and he busted up the oil and railroad trusts.
FDR thundered against the "economic royalists," raised
taxes on the wealthy, and gave average working people the right to form
unions - along with Social Security, unemployment insurance, a minimum
wage, and a 40-hour workweek.
But Mitt Romney is not a traitor to his class. He is a
sponsor of his class. He wants to cut their taxes by $3.7 trillion over
the next decade, and hasn't even specified what "loopholes" he'd close
to make up for this gigantic giveaway.
And he wants to cut benefits that almost everyone else
relies on - Medicare, Medicaid, Social Security, food stamps,
unemployment insurance, and housing assistance.
He's even a warrior for his class, telling his wealthy
followers his job isn't to worry about the "47 percent" of Americans
who won't vote for him, whom he calls "victims" and he berates for not
paying federal incomes taxes and taking federal handouts.
(He mangles these facts, of course. Almost all working
Americans pay federal taxes - and the federal taxes that have been
rising fastest for most people are Social Security payroll taxes, which
aren't collected on a penny of income over $110,100. Moreover, most of
the "47 percent" whom he accuses of taking handouts are on Medicare or
Social Security - the biggest "entitlement" programs - which, not
incidentally, they paid into during their working lives.)
Money means power. Concentrated wealth at the top
means extraordinary power at the top. The reason Romney pays a rate of
only 14 percent on $13 million of income in 2011 - a lower rate than
many in the middle class - is because he exploits a loophole that allows
private equity managers to treat their income as capital gains, taxed
at only 15 percent.
And that loophole exists solely because private equity
and hedge fund managers have so much political clout - as a result of
their huge fortunes and the money they've donated to political
candidates - that neither party will remove it.
In other words, everything America is learning about
Mitt Romney - his tax returns, his years at Bain Capital, the video of
his speech to high-end donors in which he belittles half of America, his
gaffes, the budget policies he promotes - repeat and reenforce the same
underlying reality.
So much wealth and power have accumulated at the top
of America that our economy and our democracy are seriously threatened.
Romney not only represents this problem. He is the living embodiment of
it.
Robert B. Reich, Chancellor's Professor of Public
Policy at the University of California at Berkeley, was Secretary of
Labor in the Clinton administration. Time Magazine named him one of the
ten most effective cabinet secretaries of the last century. He has
written thirteen books, including the best sellers "Aftershock" and "The
Work of Nations." His latest is an e-book, "Beyond Outrage." He is also a founding editor of the American Prospect magazine and chairman of Common Cause.
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