Thursday, April 23, 2009

Republican Socialists of America: Theodore Roosevelt, Dwight D. Eisenhower, Richard Nixon, and Ronald Reagan

by: Paul Rosenberg

Theodore Roosevelt

Teddy Roosevelt, a conservative? Not so much. In fact, when it came to socialism, this is what Roosevelt said in his autobiography:
Because of things I have done on behalf of justice to the workingman, I have often been called a Socialist. Usually I have not taken the trouble even to notice the epithet. I am not afraid of names, and I am not one of those who fear to do what is right because some one else will confound me with partisans with whose principles I am not in accord. Moreover, I know that many American Socialists are high-minded and honorable citizens, who in reality are merely radical social reformers. They are oppressed by the brutalities and industrial injustices which we see everywhere about us. When I recall how often I have seen Socialists and ardent non-Socialists working side by side for some specific measure of social or industrial reform, and how I have found opposed to them on the side of privilege many shrill reactionaries who insist on calling all reformers Socialists, I refuse to be panic-stricken by having this title mistakenly applied to me.

So, it looks like Roosevelt would have voted for Obama, if he were still around today. And it looks that way even moreso, if think about his tax proposals. Although the income tax did not exist when he was President, Roosevelt was a firm proponent of it--as well as the estate tax. Talk about a tax-raiser, he was a tax-creator--or at least, he wanted to be. The following passages are from his 1907 State of the Union. First, on the income tax:

When our tax laws are revised the question of an income tax and an inheritance tax should receive the careful attention of our legislators. In my judgment both of these taxes should be part of our system of Federal taxation. I speak diffidently about the income tax because one scheme for an income tax was declared unconstitutional by the Supreme Court; while in addition it is a difficult tax to administer in its practical working, and great care would have to be exercised to see that it was not evaded by the very men whom it was most desirable to have taxed, for if so evaded it would, of course, be worse than no tax at all; as the least desirable of all taxes is the tax which bears heavily upon the honest as compared with the dishonest man. Nevertheless, a graduated income tax of the proper type would be a desirable feature of Federal taxation, and it is to be hoped that one may be devised which the Supreme Court will declare constitutional.

Next, on the inheretance tax:

The inheritance tax, however, is both a far better method of taxation, and far more important for the purpose of having the fortunes of the country bear in proportion to their increase in size a corresponding increase and burden of taxation. The Government has the absolute right to decide as to the terms upon which a man shall receive a bequest or devise from another, and this point in the devolution of property is especially appropriate for the imposition of a tax. Laws imposing such taxes have repeatedly been placed upon the National statute books and as repeatedly declared constitutional by the courts; and these laws contained the progressive principle, that is, after a certain amount is reached the bequest or gift, in life or
death, is increasingly burdened and the rate of taxation is increased in proportion to the remoteness of blood of the man receiving the bequest. These principles are recognized already in the leading civilized nations of the world....

A heavy progressive tax upon a very large fortune is in no way such a tax upon thrift or industry as a like would be on a small fortune. No advantage comes either to the country as a whole or to the individuals inheriting the money by permitting the transmission in their entirety of the enormous fortunes which would be affected by such a tax; and as an incident to its function of revenue raising, such a tax would help to preserve a measurable equality of opportunity for the people of the generations growing to manhood.

Roosevelt goes on to sharply distinguish this from socialist proposals....

We have not the slightest sympathy with that socialistic idea which would try to put laziness, thriftlessness and inefficiency on a par with industry, thrift and efficiency; which would strive to break up not merely private property, but what is far more important, the home, the chief prop upon which our whole civilization stands. Such a theory, if ever adopted, would mean the ruin of the entire country-a ruin which would bear heaviest upon the weakest, upon those least able to shift for themselves. But proposals for legislation such as this herein advocated are directly opposed to this class of socialistic theories.

Roosevelt quoting Lincoln ......
Our aim is to recognize what Lincoln pointed out: The fact that there are some respects in which men are obviously not equal; but also to insist that there should be an equality of self-respect and of mutual respect, an equality of rights before the law, and at least an approximate equality in the conditions under which each man obtains the chance to show the stuff that is in him when compared to his fellows.


Dwight D. Eisenhower

Eisenhower firmly rebuked the reactionary wing of the Republican Party. In a 1954 letter to his brother, Edgar Newton Eisenhower, he wrote:

Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas.5 Their number is negligible and they are stupid.

He did cut taxes, though. In 1953, when he took office, the top marginal income tax rate was 92%. Ike thought this was outrageous. He cut the rate to 91%. That's well more than twice the top rate that Obama propose


Richard Nixon

Richard Nixon tried to implement a form of negative income tax as a way of substituting direct cash payments for bureaucratic forms of welfare assistance:

Nixon had experienced the sting of poverty as a child, and he never forgot it. But while he sympathized with the poor, he also shared many Americans' conviction that the welfare system had grown into an inefficient bureaucracy which fostered dependency and low self esteem among welfare recipients and contributed to the breakdown of families by providing assistance only to households which were not headed by a working male.

With the assistance of Urban Affairs Council secretary Daniel Patrick Moynihan, Nixon created the Family Assistance Plan. FAP called for the replacement of bureaucratically administered programs such as Aid to Families with Dependent Children, Food Stamps, and Medicaid, with direct cash payments to those in need. Not only single-parent families, but the working poor would qualify for aid. All recipients, save the mothers of preschool age children, would be required to work or take job training.

Nixon revealed FAP in a nationwide address on August 8, 1969. Heavy criticism followed. Welfare advocates declared the income level Nixon proposed -- $1600 per year for a family of four -- insufficient. Conservatives disliked the idea of a guaranteed annual income for people who didn't work. Labor saw the proposal as a threat to the minimum wage. Caseworkers opposed FAP fearing that many of their jobs would be eliminated. And many Americans complained that the addition of the working poor would expand welfare caseloads by millions. A disappointed Nixon pressed for the bill's passage in various forms, until the election season of 1972. He knew a bad campaign issue when he saw one, and he let FAP expire.

What's more, as can be seen below, under Nixon, the tax rates--particularly on high earners--were as high or higher as they were under Kennedy and Johnson:


Ronald Reagan

Even more than Teddy Roosevelt, McCain likes to associate himself with Ronald Reagan. But though Reagan talked a good conservative game, when push came to shove, he often switched directions. In fact, he not only rolled up record deficits, he raised taxes, saved Social Security, and greatly expanded the same type of negative income tax measures (refundable tax credits) that McCain is railing at Obama for.

In my earlier diary, "John McCain Makes A Fool Of Himself, Again--Obama the Socialist Edition", I brought up the most successful form of negative income tax in US history--the Earned Income Tax Credit (EITC or EIC). It was introduced under Republican President Gerald Ford, and then expanded under Ronald Reagan:

Enacted in 1975, the initially modest EIC has been expanded by tax legislation on a number of occasions, including the more widely-publicized Reagan EIC expansion of 1986. The EIC was further expanded in 1990, 1993, and 2001 regardless of whether the act in general raised taxes (1990, 1993), lowered taxes (2001), or eliminated other deductions and credits (1986). Today, the EITC is one of the largest anti-poverty tools in the United States (despite the fact that most income measures, including the poverty rate, do not account for the credit), and enjoys broad bipartisan support.

Reagan also helped save Social Security, in partnership with House Speaker Tip O'Neill, as Joshua Green explained in an article for Washington Monthly in early 2003, "Reagan's Liberal Legacy":

Reagan also vastly expanded one of the largest federal domestic programs, Social Security. Before becoming president, he had often openly mused, much to the alarm of his politically sensitive staff, about restructuring Social Security to allow individuals to opt out of the system--an antecedent of today's privatization plans. At the start of his administration, with Social Security teetering on the brink of insolvency, Reagan attempted to push through immediate draconian cuts to the program. But the Senate unanimously rebuked his plan, and the GOP lost 26 House seats in the 1982 midterm elections, largely as a result of this overreach.

The following year, Reagan made one of the greatest ideological about-faces in the history of the presidency, agreeing to a $165 billion bailout of Social Security. In almost every way, the bailout flew in the face of conservative ideology. It dramatically increased payroll taxes on employees and employers, brought a whole new class of recipients--new federal workers--into the system, and, for the first time, taxed Social Security benefits, and did so in the most liberal way: only those of upper-income recipients. (As an added affront to conservatives, the tax wasn't indexed to inflation, meaning that more and more people have gradually had to pay it over time.)

By expanding rather than scaling back entitlements, Reagan--and Newt Gingrich after him--demonstrated that conservatives could not and would not launch a frontal assault on Social Security, effectively conceding that these cherished New Deal programs were central features of the American polity.

Reagan also raised taxes a lot more often and more freely than any conservative would dare to admit. Here's just a snippet of what Green has to say on that:

The historic Tax Reform Act of 1986, though it achieved the supply side goal of lowering individual income tax rates, was a startlingly progressive reform. The plan imposed the largest corporate tax increase in history--an act utterly unimaginable for any conservative to support today. Just two years after declaring, "there is no justification" for taxing corporate income, Reagan raised corporate taxes by $120 billion over five years and closed corporate tax loopholes worth about $300 billion over that same period. In addition to broadening the tax base, the plan increased standard deductions and personal exemptions to the point that no family with an income below the poverty line would have to pay federal income tax. Even at the time, conservatives within Reagan's administration were aghast. According to Wall Street Journal reporters Jeffrey Birnbaum and Alan Murray, whose book Showdown at Gucci Gulch chronicles the 1986 measure, "the conservative president's support for an effort once considered the bastion of liberals carried tremendous symbolic significance." When Reagan's conservative acting chief economic adviser, William Niskanen, was apprised of the plan he replied, "Walter Mondale would have been proud."

What's more, when he was governor of California, Reagan faced a budget crunch, and responded by agreeing the the Democratically-controlled legislature to respond with a balance of spending cuts and tax hikes raising the highest tax bracket. That's a step that the so-called "moderate" Governor Arnold Schwarzenegger has been either unwilling or unable to take.

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