Quick, name the type of government system do we have in the United States of America!
Did you say Democracy? If you did, that is fair, since that is what we call ourselves, but that isn’t quite accurate.
Did you say Representative Democracy or Democratic Republic? You are closer. This is what our government was designed to be, and still contains elements of.
But I would argue that the correct answer is that the United States has become a Representative Plutocracy, or a Plutocratic Republic. I do not know how long our country has had elements of Plutocracy, but as time has gone on, it has only gotten more so.
What?! The United States of America isn’t a democracy of some sort?! How can that be???? Aren’t we the champions of liberty and democracy around the world?
I know, this can seem like a pretty strong claim. After all, if America isn’t a Representative Democracy, then a huge part of what most Americans have learned and believe about their country is a lie.
But hear me out.
In 1907, the first law prohibiting corporate donations to political campaigns was passed. It was called the Tillman Act. However, the rule only applied to general elections, did not prevent individuals from donating as much as they wanted, then being reimbursed by their companies, and did not include any method of enforcement.
Other laws during the first half of the 20th century affected campaign contributions, but the biggest and most important was the Federal Election Campaign Act, which was passed in 1971 and amended in 1974. At first, the biggest things that this law did were require more stringent disclosure by politicians, political parties, and political action committees (PACs) of the donations they receive, and provide public financing for presidential campaigns. Then, the 1974 amendments created the Federal Election Commission (FEC) and imposed limits and restrictions on campaign contributions and expenditures.
It was a real chance to safeguard the “democratic” portion of democratic republic.
But it was not to be.
Elements of the Federal Election Campaign Act were challenged in the 1976 Supreme Court case Buckley v Valeo. The Supreme Court’s decision upheld individual limits on campaign contributions, but removed campaign expenditure limits, and created the loophole for PACs that enabled them to circumvent donation disclosure laws by not directly working with or directly campaigning for or against specific political candidates. But most importantly, it established political spending as speech protected by the First Amendment.
That last part is where things get really sticky.
You see, from there, you get First Bank of Boston v Bellotti in 1978, which is the first Supreme Court case to protect corporate campaign contributions as protected speech.
Then, in 2010, there was the landmark case Citizens United v FEC. It basically allowed groups and organizations not directly associated with a political campaign to spend as much as they wanted on political ads, so long as they identified their group or organization as having run the ad, and do not coordinate with political campaigns.
In 2014, the Supreme Court struck down limits on aggregate campaign contribution limits in McCutcheon v FEC, which means that now, while an individual or corporation is limited in how much they can contribute to any one political campaign, they can donate as much as they want to political campaigns generally.
All this is to say that corporations and wealthy individuals have many ways to make their money talk in our current political system. And this just covers the ways they make it talk during elections, never mind the promises they can make politicians and other government officials for things like lucrative speaking gigs and cushy high-salary jobs after they leave government.
All of this goes to show that money is allowed to play a role in politics, but how big of a role does it play?
First, I want to look at marginal income tax rates. (Here is a link to explain what marginal income tax rates are and how they work. If you don’t know what they are, I encourage you to read it.)
From 1935-1981, the highest marginal income tax bracket was taxed 70% or higher. This meant that the wealthiest among us were either reinvesting their money into their businesses, or paying large portions of their income in taxes.
Then, in 1981, President Reagan, the first fiscal conservative President since the Supreme Court’s Buckley v Valeo decision in 1976, passed the Economic Recovery Tax Act. This reduced the top marginal income bracket from a 70% tax to a 50% tax. Then, in 1986, Reagan signed another bill called the Tax Reform Act that reduced the top marginal income bracket rate to 38.5% in 1987 and then to 28% in 1988. These two bills together are known as the Reagan Tax Cuts.
While the rate for the top marginal income tax bracket has increased since then, it has not gone above 40%.
This means that our politicians of both parties have worked to keep more of the rich’s money in the rich’s pockets than there has been since the Great Depression. The political theory known as trickle-down economics was used to justify this, saying that more wealth for the wealthy would stimulate the economy and that the resulting prosperity would help everyone.
This has been proven to be false, as the vast majority of new wealth in this country is going only to top earners. Yet, we still have such low marginal tax rates. The best reason I can come up with for this is that top earners have an extremely disproportionate influence on politics, thanks to their ability to use their money as political speech.
And they do. A study conducted by Princeton University published in 2014 looked at federal bills considered between 1981 and 2002, and tracked the effects of the views of median income earners, top income earners, mass public interest groups, and business interest groups. The study found that the views and positions of median income earners have a 5% chance of affecting the outcome of the success or failure of a bill, while those of top income earners have a 78% chance, mass public interest groups have a 24% chance, and business interest groups have a 43% chance. This means that it is businesses and the wealthy who have the largest effect on what laws get passed in this country.
So, the wealthy and corporations do a lot to determine what information (or misinformation) we receive about the political candidates we have to choose from, especially in federal elections (though, increasingly in state elections as well). Then, once those politicians are in office, the wealthy and corporations have a much larger say in how they govern than the general public does.
We need to get money out of politics and political campaigns. We need to take back our country from the wealthy and corporations. We need to reestablish the United States as a Democratic Republic.
If we do not, then our slide into Plutocracy is likely to only continue. Then, one day, we will have no way of turning it back without revolution. Let’s not let it come to that.
disenfranchisedmoderate 