Hurricane Irene spares the nation from corporate MLK dedication

The Martin Luther King Jr. memorial on the National Mall was set to be dedicated this coming Sunday, but that dedication has been postponed due to Hurricane Irene. While I do not have any strong feelings one way or another about the monument itself, the way in which it was set to be dedicated has piqued my interest.

In order to raise money for the MLK memorial, Alpha Phi Alpha solicited donations from corporate sponsors. The list of corporate sponsors include the General Motors Foundation, Chevrolet, the Tommy Hilfiger Corporate Foundation, Aetna, Boeing, BP, Coca-Cola, Delta Air Lines, GE, McDonald’s, Travelers, and Walmart. These sponsors were given distinguished titles as either Dedication Chairs, Co-Chairs, or Vice Chairs.

Given MLK’s staunch anti-capitalism, the inclusion of any corporate sponsors in public roles is extremely bizarre. Corporations involve themselves in projects like this in order to boost their public image so that they can further their oftentimes exploitative enterprises. For instance, the BP_America twitter account has managed to mention its involvement in the monument 26 times in the last 2 days. I feel safe speculating that Martin Luther King Jr. would rather have no memorial at all than one which allowed massive corporations like BP to score public relations points.

In addition to the general absurdity of a corporate-sponsored MLK monument, the specific list of corporations involved in the sponsorship includes some of the worse corporate actors out there. Does anyone seriously think that MLK would be supportive of naming Wal-Mart, BP, and Coca-Cola of all corporations as Dedication Vice-Chairs for a monument in his honor?

Recall that Martin Luther King once argued:

A true revolution of values will soon look uneasily on the glaring contrast of poverty and wealth. With righteous indignation, it will look across the seas and see individual capitalists of the West investing huge sums of money in Asia, Africa and South America, only to take the profits out with no concern for the social betterment of the countries, and say: “This is not just.”

For those not aware, the capitalistic behavior being condemned by MLK in that quote exactly describes what Coca-Cola does in South America, what Wal-Mart does in China, and what BP has done all over the world, most notably in Iran. It seems obvious that MLK would disapprove of any association of himself with those corporations.

Recall also that King died fighting for garbage men who made inhumane wages, were treated poorly, and who were aggressively prevented from exercising their rights to collectively bargain. McDonald’s and Wal-Mart famously do all of those things to their millions of low paid workers whose rights to unionize have all but been stripped from them by the companies’ corporate practices. Once again, I cannot see MLK wanting anything else but to distance himself from Wal-Mart and McDonald’s, something this monument’s partnership does the opposite of.

Finally, recall that King vehemently criticized U.S. militarism, specifically in relation to its involvement in Vietnam. In his famous anti-war speech, King decried the cancer of militarism. He remarks at one point in the speech:

When machines and computers, profit motives and property rights are considered more important than people, the giant triplets of racism, militarism and economic exploitation are incapable of being conquered.

King no doubt has in mind many things in that sentence, but prominently in his consideration is militaristic war profiteering. This of course is where Dedication Vice-Chair Boeing makes a significant chunk of its money. The Boeing corporation builds all sorts of war planes and munitions, grabbing up hundreds of billions of dollars in government expenditures that King rightly argued would be better spent on programs of social uplift.

The inclusion of these corporations should really be seen as an embarrassment for the organizers of the MLK monument. There is little doubt that MLK would be embarrassed to be associated with any of them, something Alpha Phi Alpha apparently did not consider or did not see as important. Ultimately, it probably matters little what happens with this monument: King’s profound radicalism on issues of economic injustice and militarism has already been erased from the popular historical record. That we can even have a monument built on the National Mall that war contractors and union busters are willing to sponsor demonstrates that.

With that said, there is still something rightly repugnant about the Martin Luther King Jr. Memorial brought to you by Coca-Cola.

Income tax claims are confused

The claim that half of Americans do not pay income taxes has been bandied about by Republican presidential candidates lately. The three front runners — Michelle Bachmann, Rick Perry, and Mitt Romney — have all thrown out the statistic in stump speeches in the past few weeks. It seems odd that Republicans would complain about individuals paying low taxes given that their opposition to taxation is probably the core feature of their party’s brand.

Of course, these candidates do not actually oppose taxation in general, just the taxation of the super-rich. Trotting out the claim that half of Americans do not pay taxes is no more than an effort to generate a counter-narrative that the wealthy are actually the ones being oppressed. Unsurprisingly, this attempted narrative is as confused as the income tax claims that it rests on.

Most of the commentators who have responded to the income tax talking point have rightly pointed out that income taxes are not the only taxes. The poor pay a higher percentage of their income in federal FICA taxes as well as state and local taxes. In fact, one of the motivations for the Earned Income Tax Credit — a credit which helps contribute to the low nominal income tax payments of the poor — was to counteract the regressive nature of the Social Security taxes.

But this rebuttal avoids the main driver of the income tax confusion: the total misunderstanding of what the tax code is. The reason citing numbers about the percentage of people who pay income taxes is so foolish is that the tax code serves a dual function: it is used both to generate revenue and to implement certain government programs.

For example, take the mortgage interest tax deduction. At some point, the Congress decided that it wanted to create a program to pay some of the loan interest for those who held mortgages, ostensibly to encourage home ownership. The government could have implemented this in one of two ways. It could have created a Mortgage Interest Agency (MIA) that sent checks to those paying a mortgage, or it could have allowed them to deduct from their taxes an equivalent amount of money. Fiscally and economically speaking, these two actions are identical.

Even though these two approaches are identical in all relevant ways, the deduction-oriented route leads to lower nominal tax payments than the MIA route. No one could seriously maintain that this distinction matters, but it is precisely this kind of distinction that the claims about half of the population not paying taxes rests on. What is actually going on in all of these cases is that government programs being implemented through the tax code — deductions for the elderly, exemptions for parents and the poor, and other various tax credits — transfer the same amount or more money than the households pay in taxes.

The objection to the non-paying of taxes then is totally confused. Is the objection really just that nominal tax payments are zero? If that is the case, perhaps we ought to just create an Elderly Benefits Agency, Earned Income Agency, Child Benefits Agency, and so on to replace the more efficient way we currently enact cash transfers through the tax code. Shifting cash transfers to check-writing agencies would ensure that everyone paid their exact marginal rate.

Presumably these Republican candidates are not just objecting to the way in which the programs are carried out, but something more substantive than that. However, phrasing their objection in terms of zero tax payments leaves their actual objection completely unclear.

As mentioned before, what is going on in these cases they are objecting to is that poor and old people are receiving more from government programs than they are paying in taxes. Is the objection that a person should not benefit more from government programs than they pay in taxes? That is the only thing remotely coherent, but it is so extreme a view that I am hesitant to attribute it to even figures as right wing as Bachmann and Perry.

The logical consequence of this sort of view would make even a flat tax in which everyone paid an identical percentage objectionable. After all, in a flat tax, low income earners still necessarily benefit more from government services than they pay in, at least in a superficial sense. Someone making 100x what someone else made would pay 100x more while receiving the exact same benefit from military services, police services, emergency services, infrastructure projects, and so on. Even though this kind of spending does not manifest itself as cash payments like tax expenditures do, that does not make it any different.

Even if all individuals paid a flat tax and received the same government services, the bottom half of income earners would still be paying less in taxes than they get back in government services. So, under the only coherent interpretation of the no-tax objection, this ideal Republican world would still be equally objectionable.

No matter how you try to cut up this talking point, it winds up empty or confused. These candidates either do not understand how the tax code functions, are being intentionally misleading, or have embraced full-fledged Randian insanity more than I have given them credit for. In any case, the bizarre focus on zero nominal tax payments is so confused that it is difficult to even grasp what if any real point is being made.

Study misses what poverty is about

The Heritage Foundation released a report today about poverty that managed to get some traction in the media. There is nothing terribly new in the report; it is basically a statistically-rich rehashing of the idea that poor people are not really poor. The Heritage Foundation provides a long list of what are mainly cheap, consumer electronics, and then reports on what percentage of impoverished households have them. The suggestion is that America’s poor are actually living quite well because most of them have a television, coffee maker, air conditioning, and other similar amenities in their households.

The timing of this report is fairly suspect. All of the data in the figures is from 6 years ago which suggests that in addition to there being nothing new in the approach, there is also nothing new in the statistics. Of course, publishing a report like this right now makes sense politically as a background for a deficit reduction bill that is poised to take away trillions of dollars from the poor in the coming decade. If they are not really poor — as the Heritage Foundation suggests — then making them pay for the budget deficit must not be nearly as inhumane a policy as it sounds.

Responses to the arguments have been fairly limited. Derek Thompson at The Atlantic makes the point that although consumer electronics are getting cheaper, the more essential items like housing, food, health care, and education are getting much more expensive. A one-time purchase of a television set hardly makes up for the wage-eating rise in rents. Matthew Yglesias forwards a similar argument pointing out that although electronics are more accessible, “if you’re looking to live in a safe neighborhood with good public schools in a metropolitan area with decent job opportunities you’re going to find that this is quite expensive.”

These responses are worthwhile in demonstrating the absurdity of the Heritage Foundation’s selection of amenities to measure. However, they problematically rely on the same misconception that the harms of poverty are exclusively tied to some sort of objective material deprivation. Although being deprived of quality material goods is a big aspect of poverty — especially when talking about poverty in absolute terms — there are additional impacts of poverty that are just as damaging.

For instance, one of the most difficult aspects of living in poverty is being in a state of total instability. A family of three making $18,000 per year is always a single step away from total insolvency. If it is even possible for that family to find a place where they can make ends meet reliably, they will almost certainly accumulate no savings. They will live in a dangerous, run-down neighborhood with the threat of crime and violence always present — granted with a refrigerator and toaster in their apartment. Due to their scarce financial resources, any kind of disruption (e.g. an illness or a layoff) will leave them short on their bills, constantly in interest-accruing debt, and never certain whether this will be the month they get kicked out of their rental unit for failure to pay.

It is the utter terror and anxiety of that kind of life that is really the defining feature of poverty, and the reason why a moral society would be interested in doing whatever it takes to eradicate it. In the United States, it is not likely that someone will be so poor that they starve. They might be so poor that their food options leave them horribly unhealthy, but even the poorest in the society are typically able to find the absolute bare necessities to keep on living.

Debates about how much above those bare necessities should be considered legitimately poor completely miss the point. Having some index of goods does not make your life stable and secure, and consequently does not shield you from the psychological impacts of living in perpetual uncertainty about the next month’s expenses. That is what poverty is about, and that is why studies like those produced by the Heritage Foundation are so vacuous.