Who Should Pay for Infrastructure Repair: Fat-Cat Tax Cheats or Working Americans?
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Rep. Jim Oberstar of Minnesota has just proposed a bill to increase gas taxes to pay for bridge repairs across the nation. He tells the public, "If you're not prepared to invest another 5 cents in bridge construction and road reconstruction, then God help you."
Yes, our country's infrastructure needs fixing. We need to secure power plants, roads, bridges, dams, water treatment facilities, shipping ports. We spent only 1/10 of 1 percent of our GDP on infrastructure in 2005, compared to 9 percent for China. The American Society of Civil Engineers estimates that $320 billion per year will be needed over the next five years to repair the nation's infrastructure.
But it is irresponsible to take this money from average wage-earning Americans. Between 1970 and 2000 the annual pay increase for wage earners, adjusted for inflation, averaged 5 cents per hour. Incomes actually declined over that period for all but the top 10 percent of American households filing tax returns.
So where can we find the money? At the risk of redundancy, from the wealthy, from corporations, from the military, from people who haven't paid their fair share for years. In contrast to the 5 cents per hour earned by average workers over 30 years, CEO raises averaged $660 per hour. Meanwhile, the tax burden has been shifting from the wealthy elite to the average taxpayer. The top income tax rate for the very rich is 35 percent, but they pay a very small percentage of their incomes in social security taxes, sales tax and local taxes. With all of these extra taxes taken into account, the average wage earner pays about a 40 percent overall tax, about the same percentage as the average American millionaire. Furthermore, wealthier people are more likely to take advantage of the 15 percent capital gains tax on stock purchases. In addition, thanks to the Bush tax cuts, the richest 1 percent of Americans are now scheduled to receive an extra $34,000 per year while the poorest 20 percent will receive only $77. That's $700 billion to the richest 1 percent of the population over 10 years.
Some of the bridge repair money should come from the corporations who enjoy unfair tax advantages. Even though corporate profits have risen much faster than wages, the portion of federal revenue derived from corporate income tax has decreased from 33 percent in the 1950s to 12 percent in 2005. Eighty-two of our largest corporations paid no tax in at least one of the first three years of the Bush administration.
Some of the bridge repair money should be taken from the military budget, which has almost doubled since the year 2000. Over 40 percent of each American citizen's tax bill, about $5,000 a year, goes to the military. President Bush approved a record U.S. defense budget for 2008 of $481 billion, with an additional $200 billion for the Middle East wars. The five main U.S. defense contractors -- Lockheed Martin, Boeing, Raytheon, Northrop Grumman, and General Dynamics -- took $35 billion of our tax dollars in 2006 to produce major weapons systems, many of which are sold to other countries. Lockheed is selling 100 F-35s to Turkey, which already has over 200 F-16 fighter planes, is 94th on the United Nations' Human Development Index, and has a 9 percent favorable view of the United States among its citizens.
Some may resist a military cutback in the face of a growing terrorist threat. But the 2008 budget will increase spending on aircraft and other weapons designed to counter a single powerful enemy, rather than distributed guerrilla or terrorist forces. A task force of 14 military and foreign policy experts published "A Unified Security Budget for the United States 2006," which recommends cutting $53 billion from the military budget and spending $40 billion more on international affairs, counterterrorism and peacekeeping operations. The waste and inefficiency in U.S. military spending is highlighted by a Natural Resources Defense Council (NRDC) report that describes "an excessive stockpile of high-yield Cold War weapons that now clearly are no longer needed."
A gas tax on its own might make sense for environmental reasons. But not to pay for infrastructure. Mr. Oberstar should be asking God to help those who are exploited by the wealthy and the warmakers.
Paul Buchheit is a professor with the Chicago City Colleges, co-founder of Global Initiative Chicago (GIChicago.org) and the founder of fightingpoverty.org. He is the editor and main contributor to the forthcoming book American Wars: Illusions and Realities (Clarity Press).