Is the “fiscal cliff” debate a proxy for a conversation about race?

By Alan Bean

Are we talking about the “fiscal cliff” because we are afraid to talk about race?  Imara Jones of Colorlines thinks so.

This is not your standard, “hooray for our side” culture war trope; the argument here is that the blue team is just as responsible for muddying the waters as the red team.

According to this account, Republicans gained power in the late 1970s, and have held power ever since, by arguing that programs designed to help the poor are morally debilitating gifts squandered on lazy black people.  The argument proved so successful that Democrats challenged it at their peril.  As Jones points out, it was a Democratic president that ended welfare as we know it.

Among Republicans, the idea that black people vote for Democratic candidates because they want welfare is deeply entrenched.  But the success of the Republican “welfare is toxic” argument is best reflected in responses to the common opinion poll question about whether welfare does more harm than good.  When the question for first asked in a Wall Street Journal/NBC News poll in 1995, 72% of whites, 57% of current or former welfare recipients, and 52% of African Americans agreed.  The numbers haven’t changed that much in intervening years.

It is difficult to argue that the government needs to do more to help poor people of color when even the recipients of government assistance think welfare is counterproductive.  Barack Obama knows that, given the current state of public opinion, Democrats can’t win this argument.  On the other hand, a majority of Republicans support the idea of raising taxes on the rich, so that’s the way the argument is framed.

It might be easier to argue for compassionate budget priorities if “welfare as we know it” was replaced by programs dedicated to providing meaningful work to unemployed individuals who aren’t responsible for raising young children.  Unfortunately, the jobs our economy creates for unskilled workers come with poverty wages.  Walmart routinely counsels its employees in the art of applying for government-sponsored poverty programs; they know most of the jobs they advertise don’t pay a living wage.   

If we’re going to provide unemployed adults with meaningful work, these jobs would have to pay enough to hold a family together with a measure of dignity.  Why not pay people (including ex-felons) to repair and revitalize the infrastructure in their own neighborhoods?

I suspect most “welfare is toxic” people would object to such a policy, but it would win far more public support than programs that are widely believed to do more harm than good.  If people object to paying people to repair and beautify their own communities, racial resentment cuts far deeper than is widely appreciated.

On Race and Taxes, Both Parties Insist Upon Speaking No Evil

by Imara Jones

November 30 2012

Our current national argument over taxes, debt and the fiscal cliff is nominally about balancing spreadsheets and the arcana of economic formulas, but it’s actually about race. And the fact that those on either side of the budget conversation—both Democrats and Republicans—will not acknowledge as much prevents us from having an honest conversation about what’s at stake.

After the election, President Obama reiterated his call for the top 2 percent of income earners—those making more than $200,000 a year—to pay more. Doing so, he argues, will help ease the country’s current budgetary strain.

Obama couches his case in terms of simple economic fairness, stating that “billionaires and millionaires can afford to pay a little more.” But we’re actually engaged in a bigger debate about racial inequity.

The truth of the matter is that for the past three decades we’ve constructed a tax policy that is responsible for the lowest level of black and brown wealth on record and a dramatic concentration of wealth amongst the overwhelmingly white economic elite. If that’s to change, we need real talk on race in a way that’s absent from the current debate.

According to the Federal Reserve, more than 9 out of 10 of the wealthiest Americans is white. Excluding defense and social security, a disproportionate number of Americans who benefit from government investments in health, education and economic opportunity programs—6 out of 10 federal dollars spent—are people of color.

Clearly, race is at the center of the debate over taxes, whether or not either party will admit it. Moreover, it has been so since the United States’ earliest days.

Silence Equals Inequity

Democrats and Republicans alike are today silent on this link between race and taxes, but for different reasons.

Since the 1980’s, Republicans have effectively won the debate over tax rates by successfully racializing it. They aimed to cleave working class whites away from the Democratic Party by stereotyping it as a defender of the undeserving. Ronald Reagan was the first winning Republican presidential candidate to make this assertion stick. He blamed high tax rates on government support for the poor, and absurdly claimed that black “welfare queens” lived off $150,000 a year. Most Americans bought it and the cliche lives on to this day.

Once in office, Reagan used his bogus racial archetypes to justify tax cuts for the rich.

The tax rate that the wealthiest Americans paid was 20 percent lower by the time he left office. More dangerous was the fact that taxes on money made from investments were far lower than money earned from actual work. This has the impact of moving the U.S. towards a caste system in which those born into wealth enlarge their holdings and those struggling to climb into the American dream—especially people of color—find it much harder to do so.

As Reagan’s tax policies were informed by race, they would come to have disastrous racial consequences.

Reagan’s policies have been adhered to and amped up by both Democratic and Republican presidents since Reagan left office 24 years ago, and they have created the dangerous imbalance that wiped out a generation of black and Latino wealth.

Black and brown wealth is the lowest ever measured, and another generation will pass before net worth in these communities comes back in any recognizable form. Both parties are complicit in this destruction.

This is where Obama’s muteness on race and taxes comes into play. It reflects the fact that Democrats conceded the ground on Reagan’s arguments long ago.

Republicans have stopped making the link between race and taxes as explicitly as Reagan, because the concept has wedged itself so effectively in the public mind that they no longer need to do so. Democrats worry that that political cost of attempting to dislodge it would be too high. To underscore the point, a Democratic president, Bill Clinton ended welfare and further reduced taxes on money earned from investments.

This all brings us to an important but hard truth: Even if Obama succeeds in raising rates on the wealthiest Americans, people of color will still be stuck on the losing end. Rates will only go back for the rich to where they were under Clinton, and these were within striking distance of Reagan’s.

Past is Prologue

Reagan’s direct philosophical descendants are arrayed against Obama in the latest tax debate. His views on race reverberate through their actions.

Grover Norquist, founder of the right-wing Americans for Tax Reform, is the most important figure in Washington after Obama on the tax debate. Norquist literally rode into Washington on Reagan’s bandwagon. Reagan’s White House sealed the affiliation when they asked him to create a nonprofit group to help fight for their tax views. Ever since then Norquist has been one of the most powerful lobbyists in the country. Almost all congressional Republicans have signed his pledge against raising taxes under any circumstances.

Norquist’s true leverage comes from the fact that he speaks for the secretive billionaire Koch Brothers, who are propping up large parts of the GOP with immense sums of dark money.

As Lee Fang reports in The Nation, close to 70 percent of Norquist’s funding comes from the Koch Brothers and their advocacy groups. “He’s just a proxy for the powerful groups that finance him,” Fang writes.

The Koch Brothers themselves are associated with racially controversial views. They are adherents of Ayn Rand. Rand believed that black and brown “tribal” values were sapping the power of heroic millionaires, and undermining society. Disturbingly, she argued that Native Americans should be forcibly removed from their land because they’d failed to create a capitalistic society for over a thousand years on their own.

Before he was chosen as the Republican VP running mate, the Koch Brothers gave more money to Paul Ryan than any other member of Congress. Ryan is also a Rand adherent. Ryan himself argues that America’s push for racial and economic fairness was the country at its worst. Both he and the Koch Brothers find common cause in combatting a “culture of dependency” that they argue was nurtured by the New Deal and the Great Society.

Certainly for these titans of the Republican party, taxes and race go hand-in-hand.

The fact that America won’t acknowledge the debate over taxes is a proxy for one over race is not a surprise. That’s been true since before its founding, before there were such things as Democrats and Republicans. Northern colonies had asked to leave the British Empire for years over the issue of taxes; the South would have none of it, until an English court ruling threatened slavery. Since the beginning, America’s quest for independence was declared to be about taxes, but it was animated by race.

Until the country is able to tell itself the truth about taxes and race, it will continue to repeat the mistakes of the past. The current debate is not about who should pay and who should benefit. It is actually a simple one about justice. Unless we can admit as much, Americans will continue to be lost in sorting out economic rights from economic wrongs.

6 thoughts on “Is the “fiscal cliff” debate a proxy for a conversation about race?

  1. I an old line Michigan union defender. What disturbs me so greatly is that poor whites buy into this racial nonsense. We undermine our own selves.

  2. I am too old and tired to do research on this, but I think that whites have received as much welfare as people of color. This is another case of racial nonsense.

  3. Imara Jones incorrectly says, “Bill Clinton ended welfare”. We still have welfare, bigger than ever, and the disability benefits are riddled with fraud. Almost half of Americans pay no federal income tax.

  4. Gene, I’m one of the 47% who do not pay federal income tax. I have paid federal income tax only one year. 2009 I think. That was because I cashed out an endowment insurance deal in which the interest had accrued for several years. We have adequate income. It’s a fluke in the law that, as a retired minister, I get a ministerial housing allowance which can be applied to my ministerial retirement income. I file my forms and do not falsify anything.
    I think the rulings that allow this should be changed. I think the ministerial housing exception should be abolished except for ministers who are required to live in a certain house.
    There’s a significant amount of corporate welfare, welfare for wealthy farmers, etc.

  5. I was not aware of a ministerial housing allowance. In my opinion, there should be none. How about an allowance for doctors, nurses, teachers, police officers and fire fighters? How about city trash collectors, mayors and city council members? The list could go on. Our federal income tax code consists of over 3,000 pages of goodies of many kinds, most of which were obtained by lobbyiests for wealthy individuals and for businesses. In 2011, President Obama said we should eliminate those deductions to raise revenue. Now that the Republicans in the House are suggesting that, now he acts as if he ever said that insists on raising rates instead. It’s crazy.

  6. Gene, I think military personnel also have a housing allowance. Ministers and farm hired hands who are required to live in employer owned housing, should not, IMO, be required to pay federal income tax on the value of their employer provided housing. We (ministers) are required to include the housing allowance or the market value of the parsonage/manse for Social Security taxes. I paid SS taxes of 15.3% as do all so-called selef empoyed. That’s 7.65% for employee, 7.65% for employer.

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