By David Sole
On March 31 President Joseph Biden unveiled a two trillion dollar plan to modernize the infrastructure of the United States.. Does the U.S. need such an updating of its infrastructure? Most professional observers and ordinary people would strongly agree.
The U.S., consumed with endlessly increased military spending, has long neglected the upkeep and modernization of the “underlying foundation or basic framework” of the nation [merriam-webster.com/dictionary]. Domestically this neglect endangers the health and safety of the population and overall economic productivity. Internationally it economically degrades the position of the United States in relation to other countries.
Biden’s ambitious proposal faces many hurdles before it can become law. It immediately has exposed the difficulties imposed by the capitalist system in charge of this country
The Republican Party politicians, locked into “opposition at all costs,” were predictably hostile. The plan offers a massive expenditure that has a broad definition of infrastructure. It includes the traditional aspects of deteriorating roads and bridges, old water supply systems and rail systems. But it also aims to update and expand wireless broadband service from coast to coast and even expand childcare opportunities.
Die hard Republicans immediately demanded that funds only be channeled to the narrow “roads and bridges” view of infrastructure. Their outlook has no vision and is dominated by the desire to enrich those who already get big construction funding.
A greater threat is the inevitable fighting among the various industries who, like pigs at the trough, want the most they can gobble up. This is the nature of capitalism where “the executive of the modern state is nothing but a committee for managing the common affairs of the whole bourgeoisie” [Karl Marx, The Communist Manifesto]. The bosses and bankers can be united and decisive when it comes to exploiting and suppressing workers and oppressed people. But they will fight each other furiously to improve their position in the economy. The sight of trillions of dollars in juicy contracts will bring on a violent scramble.
Who is going to pay for this?
Of course the money must be borrowed by the government. Such a large sum is not readily at hand for the spending. The billionaire class will buy up the bonds as long as they feel assured that the debt will be paid off with appropriate interest in a timely manner. In the end that requires taxes be levied – but on whom?
Biden, in a populist manner, called for an increase in taxes on the corporations – from 21% maximum to 28%. What isn’t said is that the maximum tax rate was at 51% in 1951 and remained in that range until Reagan slashed it to 34% in 1988. Trump cut it to 21% in 2018.
Income taxes were not originally applied to workers’ paychecks. The Revenue Act of 1942, an emergency measure to help pay for the U.S. fighting World War II, almost doubled the number of taxpayers. Payroll deduction began then and, of course, it never ended for poor and working people.
In the 1950’s corporate taxation made up about 28% of the U.S. revenue collections. This declined to around 21% in the 1960’s. From the 1980’s on it went down to around 10%. In 2003 it made up only 7.4% of all Federal revenues. [The Decline of Corporate Income Tax Revenues, Joel Friedman, October 24, 2003]. But even these numbers are deceiving. “At least 55 of the largest corporations in America paid no federal corporate income taxes in their most recent fiscal year despite enjoying substantial pretax profits in the United States. This continues a decades-long trend of corporate tax avoidance by the biggest U.S. corporations…” [Institute on Taxation and Economic Policy, April 2, 2021].
Are we to believe that this trend is about to be reversed? If not, then we should not be surprised if the ultimate burden of rebuilding and modernizing the infrastructure of the U.S. will be shifted onto the backs of those who the capitalist class always sucks dry – the working class.
The rich never want to pay.
In the late 18th century feudal France faced financial crisis. King Louis XVI’s government needed a large infusion of taxes to pay its debts. Charles Alexandre de Calonne was appointed Controller-General of Finances in 1783 to solve the problem.
In 1787 Calonne drafted proposals for saving the economy. He realized that “certain provinces paid very little in taxes; the bourgeoisie less than the peasantry, the nobility and the clergy least of all. From a technical point of view the crisis could be easily resolved: equality of taxation would provide enough funds…, Although the sacrifices required of the privileged groups were modest.” The nobility and the wealthy landowning Catholic Church thought it unimaginable that they should have to bear the burden of taxes. Calonne was fired from his post and exiled out of Paris. [The French Revolution, Volume 1, page 98, by Georges Lefebvre].
The French Revolution was not far behind, overthrowing the feudal system and installing the rule of capitalists.
The power of an idea.
The entire Biden plan may very well be derailed by these various problems and contradictions. It isn’t hard to imagine a rational, well thought out massive rebuilding of the United States. There are many great minds who could improve housing and transportation, medical care and education, ecological balance and public safety without racist killer cops. The wealth and productive power of the United States is enormous. It could easily be figured out how to pay for a plan even bigger than Biden’s.
Hegel said “The real is rational.” That is why the very real difficulties can be understood as a result of the irrational capitalist system with its anarchy of production and a tiny, super-rich ruling class. But Hegel added “The rational is real” [Elements of the Philosophy of Right, Georg Wilhelm Friedrich Hegel]. More and more of the people see that it is sensible and achievable to improve the lives of the hundreds of millions of people in the U.S. and around the world. That thought, that another system, a collaborative, cooperative, socialist system, could easily come into existence and solve most problems of existence – that thought is also becoming a real and potent force of history. When that happens, revolution cannot be far behind.