Seattle Wealth Tax: Capitalists head to the Courts to Stop It

Seattle Times

By Richard Mellor

Afscme, local 444, retired

A story that has not warranted quite the same coverage as the impeding nuclear attack and invasion of the USA by the North Koreans, is the heightened class war around a wealth tax that Seattle City Council recently passed.

The tax would impose a 2.5% tax on individuals earning over $250,000 a year or $500,000 for couples. According to a small column in the WSJ yesterday morning the tax is expected to affect about 9000 people or 2% of Seattle’s taxpayers.  I commented on this in a previous posting (video)  I pointed out that the city’s wealthy threatened violence against the voting population if they were to pass it which they did. The particular type of violence the venture capitalists, hedge fund managers, tech billionaires and other major capitalists threatened was to move jobs to more lucrative areas for profit taking, free of regulation, unions, environmental protections and other such profit killing obstacles. Moving capital, or going on a strike of capital is a common strategy against workers’ efforts to increase our share of the wealth pie labor creates.

Imposing this wealth tax of course is seen as class war. The 1% use this term whenever workers fight back against policies that undermine our material conditions or the welfare of the members of society in general.  We are in a perpetual and never-ending class war of course but the propaganda says otherwise.

It is harder for them to deny that classes or class war exists in general (other than when we fight back) when it actually breaks out in to the open, becomes more polarized, even in the form of this mild wealth tax on people whose collective wealth would equal the GDP of some countries.

The first salvo has arrived in the form of lawsuits against the tax. The first was filed on behalf of an individual Michael Kunath on July 14th. Kunath is a money manager, investor and a "wealth manager" so he's simply doing his job protecting his side of the class divide. The Freedom Foundation, an anti-union billionaire club has filed a suit claiming the tax is illegal. It’s not the tax that bothers them you see----- it’s the “rule of law”. They are very law abiding people these folks.  The mission of the Freedom Foundation is, “… to advance individual liberty, free enterprise, and limited, accountable government.” It is one of the 1%’s many think-tanks where their strategists spend their time figuring out how they can get richer at our expense. It is naturally anti-union. Now readers of this blog know this authors view of the present day trade union leadership. But they are not “the” union, millions of members are and the millions outside the unions benefit from these organizations also. They were built by working class people through great sacrifice and heroism.  Go to the Freedom Foundation’s website and read its section on labor reform. These billionaire organizations oppose government interference except when it helps them and it always does, it is not only “their” government, they have the two dominant parties in society and workers have not one.

We must always remember that freedom means different things to different people. With classes of people that have different and antagonistic economic and political interests, one group’s freedom is another group’s oppression. One thing workers do have in common with the capitalists is that they are free to buy our labor power and we are free to sell it. And as Marx pointed out, with two forces possessing these rights, the outcome is determined by force. Having the state, the courts, the media, the police and military under their control does give the capitalists a bit of an edge initially.  Depending on the leadership unity and consciousness of us as workers things are very much in our favor, we have the numbers. If we don’t work society stops, and our children are the ones with the guns in the military.

A third suit has been filed The Freedom Foundation has been joined by another 1% club, (they have many of them) called the Opportunity for All Coalition. Isn’t that nice, opportunity for all. Now they’re trying to convince us that we can all be Bill Gates, all be millionaires if we take the bull by the horns and make the right decisions.  One argument being passed around is that the tax is illegal because it has not been passed by the legislature. Another that it is not uniform but directed at a specific group.  Working people know that taxes are not in any way uniform, Some corporations pay none and the rich have all sorts of ways of hiding money.

So the Opportunity for All Coalition has arisen as the defender of “all” of us from government tyranny. “Don't believe the hype…” the coalition’s website warns, “…this will be a tax on everyone and you're next!”   The Coalition goes on to warn us that this income tax will hurt the economy, that it will shut out opportunity. This is a subtler threat than was made previously when one of the local billionaires threatened publicly that business would move production (which means jobs) out of the city.

They care so much about jobs at times like these. But they can’t say that they will go on a strike of capital or move capital in order to maintain profits. They appeal directly to our self-interest, we need jobs to live. They make the same argument when we fight for higher wages. They argue that we if we fight for higher wages it will lead to a loss of jobs or higher prices. They don’t say if we win higher wages it will mean less profits for them, and they will respond my shifting capital, it makes them sound greedy, sound more like capitalists.

If capitalists can raise prices they will no matter what the wage rate. Prices and wages are not organically linked. And there is truth to the argument that if we tax them they’ll move production elsewhere; they will certainly try. They threatened to do so during the Boeing contract talks. They will move to the South or abroad; they don’t care. But this exposes even more the class nature of society. How can we stop them moving?

So in that sense, taxing them as this mild measure does is not the solution in the last analysis as they will exercise their right as the owners of capital to do with it what they will.

But supporting such a mild measure that clearly benefits society more fairly, is important as it forces the class struggle that they deny exists in to the open somewhat; it unmasks the reality that the 1% want to obscure in all sorts of ways.  We learn that we have no choice but to fight and that is important. Through struggle we learn.

The question of having our own party will inevitably come up. The idea that we should take over the factory, workplace, industry, will arise. Necessity is the mother of invention as someone once said.  This education process could be a much smoother and quicker one if there was a leadership of the working class that had this perspective and a strategy for implementing it. This is what we lack. But that too will arise in the courses of the future battles between capital and labor.

The next recession/slump is edging closer. This will change the landscape believe me.