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Mark Shields
Mark Shields
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Have Democrats Lost Their Souls?

Comment

Here in the early innings of the campaign of 2008, you have to know some history to remember when the Democratic Party and its presidential candidates were not afraid to afflict the comfortable by fighting for economic justice in the nation's tax laws.

In 1936, President Franklin Roosevelt won a landslide victory while boldly stating: "Here is my principle: Taxes shall be levied according to ability to pay. That is the only American principle."

Forty years later, Jimmy Carter would become — in addition to FDR — one of only two Democratic presidential candidates in U.S. history to win a majority of the nation's popular vote while repeatedly declaring: "The present tax structure is a disgrace to this country; it's just a welfare program for the rich."

By 1989, then-Democratic Rep. Dan Glickman of Kansas, not proudly, offered this candid explanation on why Democrats were no longer fighting tooth and toenail Republican efforts to annually lighten the tax burden on the richest Americans: "Money has made it more difficult for Democrats to define an economic agenda that is different from the Republican agenda. We are taking money from the same sources."

Now in September 2007, fearful and passionless Democrats — especially including the party's presidential candidates — are apparently terrified to seize ownership of the politically explosive issue of whether the country's biggest earners — partners at hedge funds and private equity firms — ought to pay their U.S. taxes at a rate roughly one-half of that paid by the people who answer their phones, teach their children and defend their country. The income tax rate paid by nearly all Americans earning between $15,650 and $63,700 a year is 15 percent, to which is added an additional 15 percent in taxes for Social Security and Medicare.

But hedge-fund and private equity managers — thanks to a loophole in the tax law so big that they could drive their Lamborghinis and Ferraris right through it — have their eight- and nine-figure annual earnings treated not as ordinary income but as capital gains income on which they are required to pay at just the maximum capital gains rate of 15 percent.

Why are Democrats mostly mute on the unacceptable injustice where the most privileged few in the top tenth of one percent of incomes only pay U.S.

taxes at a fraction of the rate the federal law levies on firefighters, cops and nurses?

Let's see who's taking money from whom. According to the authoritative Center for Responsive Politics, in the first six months of 2007, hedge funds and their employees contributed at least $4.3 million to federal candidates, of which 83 percent of that total went to Democratic candidates. While the Republican Senate and House campaign committees have apparently received no contributions from hedge funds for the 2008 campaign, their Democratic counterparts have hauled in more than $1.5 million.

This continues the pattern established in the 2004 and 2006 campaigns, when the industry gave respectively 71 percent and 77 percent of its $8.2 million in donations to Democratic candidates. The top industry beneficiary in 2004 among Senate candidates was New York Democrat Chuck Schumer, who is chairman of the party's Senate campaign committee and one of the hedge fund-private equity industry's strongest apologists.

For New York Sen. Hillary Clinton's 2008 presidential race, hedge funds and private equity contributors by June 30 had already delivered $643,220. This total made Clinton only the industry's third favorite Democratic presidential candidate, trailing Connecticut Sen. (and Senate banking committee chairman) Chris Dodd with $749,650 and Illinois Sen. Barack Obama, who banked $706,074.

Let the record show that Republicans Mitt Romney and Rudy Giuliani, between them, had pulled in $1.612 million. True, candidates Clinton and Obama followed the lead of former Sen. John Edwards in issuing statements supporting efforts to tax the fund managers. But this should be more than a onetime press release. It ought to be the rallying cry and centerpiece issue — drawn in bold, bright lines — to define where Democrats stand on economic justice and taxes based on the ability to pay, instead of meekly mumbling the weasel words of rented retainers.

To find out more about Mark Shields and read his past columns, visit the Creators Syndicate web page at www.creators.com.

DISTRIBUTED BY CREATORS SYNDICATE INC.

COPYRIGHT 2007 MARK SHIELDS



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