George McGovern’s proposals for tax reform and redistribution of income, originally released in January and published here in slightly revised form, should be read and reread by every one of the more than one hundred million Americans who dropped in the mailbox last Saturday or Sunday, with mixed feelings of civic pride and desperation, their income tax returns for 1971. McGovern’s brief statement contains more hard common sense and practical wisdom than the tired platitudes and inconclusive technical disquisitions that fill the 300 pages of the President’s Economic Report, which was transmitted to the Congress a few days after Senator McGovern made his program public.
The distribution of income is clearly emerging as the issue that will dominate the American political scene in the closing quarter of this century. The share that each member of our society receives in the immense and still swelling stream of goods and services produced annually by the American economy not only largely determines the level of satisfaction of his daily needs but also provides means for attaining many, if not all, of his highest aspirations. But more than this, under our political institutions the income and the amount of wealth controlled by any one group, in relation to other groups, determines decisively the power it can wield in influencing, not to say in directing, all government activities.
Twenty-five percent of the total gross national income is controlled directly by the government, and a much larger proportion indirectly. It is not surprising that by exercising a decisive influence on government policy, particularly in the economic sphere, a small group of citizens controlling a disproportionately high share of the national income and a still greater share of the national wealth has been capable of defending its economic and political dominance against all assaults.
In view of the close interdependence among all the parts of the modern industrial economy, the distribution of income and of wealth naturally depends, to some extent, on every one of its social and economic institutions. However, the power of the government to levy taxes, to borrow and to print money, and to use this immense purchasing power in any way it sees fit has long been recognized as one of the most effective means of bringing about a distribution of income compatible with the prevailing standards of social justice—or as an equally effective means of thwarting attempts to do so.
By the Middle Ages the Magna Charta had linked the notion of equitable taxation with the idea of social justice. The tea tax symbolized the English yoke to the rebelling Bostonians. None of the inequities of the Ancien Régime in France was hated more than the exemption from taxation enjoyed by the Church and the aristocratic upper class. The English orthodox economists, liberal in both senses of that term, staked their hopes for a truly free and fair society on a radical tax reform; so did the heterodox American Henry George.
But the cardinal importance of just taxation has receded…
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