THE MAXIMUM WAGE: a common-sense prescription
for revitalizing America
by taxing the very rich
by Sam Pizzigati. NYC: Apex Press, 1992. 144 pp, notes (101 referents)
ISBN 0-945257-45-7, US$11.95
--reviewed 1996 01 30 by Dale Wharton, Montreal <[EMAIL PROTECTED]>
AT THE START of world war two, the US commander in chief proposed a
maximum wage for wealthy Americans. This book takes up the idea. It
argues that rich people pervert democracy and sap an economy. The five
chapters look at ways the rich burden the rest of us, old wars against
wealth, a 10-times rule, life in 10-times America, and how to do it.
PACs (political action committees) began just 20 years ago. They were
to remedy election finance abuse at the time of Watergate. Today PACs
are part of the problem. They could not stop rich people corrupting
electoral politics. Losing faith, ever fewer voters now bother (except
rich voters). Can democracy survive wealth in the hands of the few?
Some resent an economy of barnyard drippings and droppings--"you feed
the cow so the flies can eat" (p 17). Should Americans rest content
with what trickles down from above? Why, yes, smile the friends of
wealth. When the rich do well, they croon, everybody wins. Others
holler no! What counts is the buying power of the public!
To make an economy run (in this alternate view) you put dollars in the
pockets of the many, not the few. When average people have money they
set it to work. They buy goods and services. They keep business busy
and jobs plentiful. Of course the filthy rich spend bundles. But they
can shop till they drop, every day of their lives, and
multimillionaires will still pass on leaving large sums unspent.
Concentration of wealth hurts the economy three ways. First, by making
more have-nots (borrowers), it brings on more shaky credit. Second, by
fueling speculation, it botches productive investment and wastes
chances to rebuild. (A feverish climate can catch up the banks, as in
1929, and trash the works.) A third strike against wealth is the
structure of large entreprise. "Hierarchies are income maintenance
programs for rich people" (p 23). Modern industrial competence demands
quick two-way communication and flexibility--too much for archaic
corporate bureaucracy. Pyramids are good for one thing, though: a 40
percent rise in pay at each level, all the way up to executive bloat.
Does wealth corrode one's character? Does it shrivel the soul? Jesus
thought so (Matthew 6:19-24, Mark 10:19-25, etc). Economics hints at a
false theme--that the rich are successful and good while the poor are
failures and bad. The effect is vicious. "If we tolerate the presence
of the rich, we let envy and grasping limit what we can be..." (p 33).
Huey Pierce Long, 1893-1935: no wonder he gets such bad press. He
sounded the call for jubilee! "`Unless you redistribute the wealth of
a country into the hands of the people every 50 years, your country's
got to go to ruination,' Long warned" (p 38, Leviticus 25:8-17). In
1934 he began a campaign: a Share-Our-Wealth Club for every US
Congressional district. It promised $5000 to each family and free
college education for all who were qualified, paid by taxing the rich.
>From the Populist hotbed of Winn Parish LA, Long was heading for the
White House. A lone gunman stopped him. Populists (they sprang up
after Reconstruction) were fighters against great wealth. All failed,
defeated by fraud, violence, the Supreme Court, or preemption.
Its official poverty line and minimum wage show an impulse for decency
in America's civil society. Yet injustice and discontent deepen. To
avoid inflation--experience proves it--any wage increase at the bottom
must come at the expense of incomes at the top. "Plato in THE LAWS...
pronounced the ideal ratio between the wealth of the richest and...the
poorest to be four to one" (p 80). The following joint tax table uses
a ratio one finds "everywhere in the world of real work" (p 84).
_________________________________________
Average Average 10Xr 10Xr tax Decile In 1990, a 10-times rule
income tax pd tx due saving ------ (10Xr) would have saved
$ 4,695 0 0 0 Bottom taxes for everyone except
10,154 0 0 0 Second the top one percentile. The
16,343 360 163 197 Third table assumes a minimum
22,492 1,012 225 787 Fourth wage of $8,000. A husband
28,123 1,715 281 1,434 Fifth and wife with joint income
33,760 2,431 675 1,756 Sixth of $40,651--the seventh
40,651 3,374 813 2,561 Seventh income decile--would pay a
49,049 4,709 1,471 3,238 Eighth 10Xr rate of two percent
63,663 7,384 1,910 5,474 Ninth (family income is between
82,154 10,844 4,108 6,736 Next 5% two and three times the
125,800 20,505 8,806* 11,699 Next 4% income of a family of two
548,969 118,028 404,969 (286,941) Top 1% minimum-wage earners).
__
* The next-to-highest 10Xr rate in the table is seven percent. For the
top one percent of American taxpayers, the rate would be 10 percent
for the first $160,000 (10 times the minimum wage for two) plus 100
percent of the rest. In 1990 this 10-times rule would have fetched
"...over $175 billion of increase" for the US Treasury (p 93). The
table adapts pretax breakdowns (p 86) from the Congressional Budget
Office 1990 GREEN BOOK, Committee on Ways and Means, pp 1186-1189.
Will Populism rise again? Can citizens hope to (1) cap incomes of the
very rich while (2) reducing taxes for the rest and (3) improving the
outlook of most people? Stranger things have happened. Expect any
federal 10-times-rule bill to die in committee. The most promising
route may be the long path of woman suffrage and of the current
proposal to balance the budget--namely, amendment to the Constitution.
__
The book is easy to read, but it lacks an index or a single list of
the sources it cites. Author Sam Pizzigati writes as a freelance in
Washington DC. With Fred J Solowey, he coedited THE NEW LABOR PRESS:
journalism for a changing labor movement (Ithaca NY: ILR Press, 1992).
%A Sam Pizzigati
%C New York City
%D 1992
%G ISBN 0-945257-45-7, LC call number HC110.I5P59
%I The Apex Press (formerly New Horizons Press), an imprint \
of the Council on International and Public Affairs
%K distribution income wealth
%O cover design and illustration by Howard Saunders, \
paperback, USD11.95
%P 144 pages
%T The maximum wage: a common-sense prescription \
for revitalizing America--by taxing the very rich
