Marxism: Redefining the Cliff

"I predict future happiness for Americans if they can prevent the government from wasting the            labors of the people under the pretense of taking care of them."

                                                                                              Thomas Jefferson

In what has been hailed as the top feel-good story for the 2012 Holiday season, a young New York City police officer, Lawrence DePrimo, gifted a barefoot homeless man with a pair of socks and boots on a bitter November night.  While walking his beat near Times Square, Officer DePrimo became concerned about the well-being of the apparently destitute man, and offered to buy him a pair of socks.  The homeless man declined, but wished God’s blessings on DePrimo, who subsequently returned with both socks and new footwear.  DePrimo’s actions were undeniably a laudable and selfless act of human kindness and compassion.

The irony of the story, however, is that the “homeless” man, Jeffrey Hillman, isn’t actually homeless at all.  In fact, the 54 year-old army veteran receives a significant amount in monthly federal subsidies for housing, food and healthcare, and has a private apartment in the Bronx in which he chooses not to live.  He receives a combination of Section 8 rent vouchers, Social Security and Veteran’s Benefits, plus food stamps and Medicaid, and has for several years. Within days, the new boots Hillman received from Officer DePrimo were nowhere to be found, and he was once again shoeless.

Jeffrey Hillman is emblematic of the failed welfare state.  For discussion here is not whether he suffers from mental illness, is worthy of receiving federal subsidies, whether he is attempting to defraud the system, or whether or not the government is a good steward of our hard-earned tax dollars. If these programs were run privately, as they were in the pre-entitlement era, they would certainly be much more tightly controlled and their administration would be significantly more efficient.  Churches, private charities and other community support groups have far less tolerance than the federal government for wanton waste of precious funds and lack of measurable results – But these are topics held for future articles and debate.

At a time when the country is in dire financial straits, entitlements are the very programs that must be critically and objectively evaluated. Yet defying common sense, liberals don’t seem to care how entitlement programs are run or what results they actually deliver.  So the question at hand is why? Why are President Obama and leading Democrats hell-bent on protecting entitlements? Despite the approaching “fiscal cliff”, entitlement programs – which are identified by most economists as destined to bankrupt America – have been labeled sacrosanct by democratic lawmakers. Like fiscal kamikazes, liberals have actually focused on crafting ever broader and richer entitlements. Who cares that tax dollars are being squandered, distributed inappropriately and produce questionable, if any, positive impact?   This is America, land of the “fair”, home of the “level playing field”, right?   It is, if you espouse the Marxist philosophy that wealth is a zero-sum game.     

 The Department of Human Welfare in Pennsylvania ran a recent analysis that determined that a single mother with one child is better off with a $29,000/year gross income than to earn a gross income of $69,000. How can it possibly be that an additional $40,000/year – well more than doubling of the lower salary – would not result in additional disposable income, you ask?  The value of entitlements.  By the time this single mother adds the various welfare subsidies to which she is entitled (Medicaid, food stamps, Section 8 subsidized rent, tax credits, etc.), she will have a net income and entitlement benefits package equaling $57,327.  After taxes, the mother earning $69,000, on the other hand, will net only $57,045. In other words, entitlements make it more profitable to remain in a job that keeps one below the poverty line than to ascend to what is arguably a respectable middle-class income.  By virtue of the structure of taxes and entitlement programs, the government penalizes work, and ultimately, success.  It is subsidizing and incentivizing a set of behaviors that will not only result in our walking the plank to financial disaster, but will place the final nail in our placard as a fully socialist economy.

While we are taunted daily by the looming “fiscal cliff”, the debate in Washington centers on how to best raise taxes on the rich.  Despite the opinions of a multitude of economists who agree that is mathematically impossible to hike taxes on the wealthy enough to balance the budget, this remains the sole focus of both the President and House Democrats. In fact, the point has been well made that actually confiscating 100% of the incomes of the country’s millionaires and billionaires would not make an appreciable dent in the national debt. There is also a threshold beyond which continuing to hike taxes will do nothing more than provide a strong disincentive to work, save and invest.  Furthermore, history has proven time and time again that raising tax rates does not translate into increased revenues to the government.  To wit, revenue as a percentage of GDP has remained essentially the same for the past century, regardless of the top marginal tax rate.

Given these facts – which are well documented and based on both historical truths and sound economic principles – it begs the question why Obama and his merry band of profligate spenders continue to push for tax hikes as the solution to the deficit and the debt crisis.  The answer, if we are to employ honest rhetoric, is that their approach is not about “taxing the rich”; it’s about “taxing the successful”.  This is Marxism, pure and simple.  It is a tactic aimed at leveling the playing field, redistributing wealth, and artificially creating equality. 

America has employed a progressive tax formula nearly continuously since Abraham Lincoln first signed it into law in 1862. When teamed however, as it has now become, with a rich and growing set of entitlement programs, we meet the very definition of Marxism:  “From each according to his ability [progressive tax rates], to each according to his need [entitlements].”  To make matters worse, in America, Marx’s dictum has been interpreted to mean “…to each according to his perceived need.”  Rather than learning from Russia’s abject suffering under Marxism, America is sliding further into that same abyss, while the cries of outrage from conservatives are increasingly drowned out by the din of degenerate comrades like the Wall Street occupiers. 

What we have created in this country is tantamount to joining a club without paying the membership fee, and then demanding that those who have paid continue to fork over more and more of their money so that you can not only enjoy the benefits of membership, but be assured that the perks are continually expanded and enhanced – All without paying a dime!

Contrary to what the media would have the American public believe, the tiresome debate about tax hikes vs. spending cuts as the way to avoid economic Armageddon doesn’t highlight the need for “bi-partisan solutions” or the centrality of ideas; it’s about the reality of arithmetic.  

There are currently more than 66 million Americans receiving some form of government support -- food stamps, Medicaid, subsidized housing or a combination.  An additional 21-plus million Americans work for the federal government, and their salaries are paid for with tax dollars. That makes 87 million people who are being directly supported by the taxpayers.  The problem is that there are only 109 million Americans working in the private sector – And of those, only 50% pay any federal income tax at all.  While it is certainly true that some percentage of government employees do pay taxes, a large number fall below the lower income limit and therefore glean their salaries from the tax base without contributing to the tax base themselves.

So in reality, roughly 55 million people are providing the vast majority of tax dollars to support an ever-growing number of people and entitlements, as well as the country’s vast and rich infrastructure (roads, schools, national defense, etc.) for which taxes were originally designed.   It’s arithmetic, stupid, and the numbers simply don’t work. 

If the goal is actually to deal with the debt crisis and not simply to decimate the existing American class structure, then the only credible solution is to drastically cut entitlement spending. Instead, we are looking at a redesign of the tax system by liberals who are using the monies to bankroll their poorly conceived and inefficiently administered programs. The Democrats’ current policies are simply not consistent with a Constitutional Republic. Their focus is on penalizing the successful and rewarding the handout recipient, all under the guise of creating a country that is “fair”.  By comparison, the current administration makes soviet dictators look like common street thugs.  In the end, we will have made the successful poorer, and Jeffrey Hillman will still be shoe-less, living on the street.  Karl Marx would be proud.