Wednesday, May 11, 2005

A Progressive Ownership Society

Over at, Gar Alperovitz argues there's a progressive tax revolt gaining currency on the local and state level.
Last November California voters approved tax increases for people making more than $1 million--and earmarked the proceeds for mental health programs. New Jersey has enacted legislation taxing those making more than $500,000–and uses the money to offset regressive property taxes.

In Connecticut–which is currently considering a new tax on incomes over a million–a recent poll found 77% of voters in favor of the tax (including 63% of Republican voters!)

The conservative Virginia State Senate has also approved legislation to raise income taxes on those making more than $150,000. And in Indiana, Mitch Daniels, once President Bush’s extremely conservative White House Budget director (“the blade”) and now governor of the state, proposed a special tax increase on residents making more than $100,000 a year

Even as Washington has been cutting taxes for the rich, these initiatives aim to raise them at the state level. The progressive tax revolt is the logical result of three fundamental realities:

First, the draconian Bush tax cuts have led to equally draconian federal spending cuts. Second, the pain these are causing is being felt at the state and local level as mounting educational, Medicaid, transportation, environmental and other problems. Third, at the state level there is politically often simply no other place to turn for revenues but to those at the top.

Unlike attempts to tax the suburbs, moreover, targeting the very top elite groups can put 95-98% of the electorate on one side of the line of political demarcation–and only a tiny 2-5% on the other side. As the Republican poll data in Connecticut suggest, the extremely unequal economic gains of the last decades have made targeting the highly favored few politically and ethically compelling.
By taxing the fortunes of the super-rich, innovative public policies on the local and state level could be financed to create wealth ownership on a community level.
[T]here are now more than 4,000 neighborhood development corporations which invest in housing and other services. Over the last three decades employee-owned companies have grown from a handful to an estimated 10-11,000. In communities all across the nation creative mayors have been establishing new municipal enterprises to produce additional revenues for public services.

Hundreds of nonprofit social enterprises also now own businesses which help pay for service provision and simultaneously create jobs for disadvantaged populations. In many cities new land trusts have created an ownership form which maintains low and moderate income housing. There are also thousands of traditional and modern cooperatives which use ownership strategies to serve more than 115 million members.
Many of Alperovitz's ideas can be found in his interesting new book, America Beyond Capitalism. Essentially, Alperovitz is trying to define a neo-socialism that is not state-driven, where capital is controlled on a community level by popular organizations and its investment is democratically controlled for the benefit of the public. These progressive and innovative initiatives that Alperovitz explores are a necessary counterweight to the corporate driven "democratic centralism" that leaves people alienated, isolated, and powerless. They are ways to bring public decision making into the economic realm, a democratic deficit too long ignored.