Tuesday, May 14, 2013

Whatever Happened to the Conscription of Wealth?


“There must be a way, and the will to peace is reinforced by one factor in the situation that is favorable to the immediate limitation of armaments, however portentous the obstacles that may interpose. That consideration is the peremptory necessity of reducing taxation. The burden of taxation is becoming unbearable. The screw will hardly bear another turn. The patience of the people is near the breaking point. And the exactions to which they are subject are all the more intolerable in the view of the billions that continue to be poured into the quicksand of militarism, while the elementary needs of mankind are not met…Is it believable, is it permissible that more than ninety percent of the national income shall be devoted to war—payment for wars past and preparation for wars to come—and that only what is left over after the mammoth maw of war has been filled may be devoted to those constructive measures which were never more bitterly called for than at present?”
~Social reformer Felix Adler on the possibility of disarmament and peace in 1921**
Last week, in an article cross-posted in Salon and In These Times, David Sirota brought attention to a what will likely be an overlooked 40th anniversary: that of the repeal of the draft. In 1973, the United States discontinued the draft, which had perhaps reached a breaking point of unpopularity with public discontent around the Vietnam War.  Since 1973, the U.S. has maintained an all-volunteer army.  In his article, Sirota implies that the repeal of the draft has been a "bad experiment" because war is no longer viewed as a "shared sacrifice." In our wars in Iraq and Afghanistan, millions of Americans did not see any change to their daily routines; the realities of war seem distant to them, and they--and the legislators who purportedly represent their interests--are more quick to support a war or forget it is even happening.  Sirota implies that a draft would make the U.S. less likely to engage in such far-reaching and frequent (and often reckless) military action.  Rep. Charlie Rangel (D-NY) has often argued for bringing back the draft because the military tends to rely on recruits from the lower end of the income spectrum, and the more affluent never have to experience the exigencies of war, making them downplay the gravity of the matter.
In this diary, I want to address the arguments that the draft made the U.S. less prone to military adventurism and that the draft embodied a sense of "shared sacrifice."  Moreover, I will, as the title applies, argue that a different problem affects the U.S.'s quickness to fight abroad in non-defensive wars: the end of the conscription of wealth.
First, the argument that the draft made the U.S. less prone to engage in wars does not hold weight.  I can understand the rationale of implementing a draft if there were an invasion on the U.S. homeland by a foreign army.  The last time the U.S. homeland was attacked by a foreign army and fought a defensive war was 1941 with the attack on Pearl Harbor; if we are looking at the lower 48, then we have to go back to the War of 1812.  The majority of the wars into which the U.S. has entered or which it has begun were not responses to foreign invasions on the U.S. homeland: they were wars of aggression.  The U.S. implemented the draft for both the Korean War and the Vietnam War, two wars in which the safety and security of the U.S. homeland were not at risk.  The possibility of the conscription of thousands--nay, millions--of youths did not make the United States government reconsider embarking upon these wars.  One might argue that the expansion of the franchise in 1971 would add extra political risk to war because those 18, 19, and 20 year-olds would be voting; however, that belief rests on two false assumptions.  First, it assumes that young people vote when, in fact, they have thelowest turnout rate of any age group.  Second, it falsely assumes that politicians would be responsive to the will of these voters and that public opinion would have a direct impact on the decision to go to war.  As we have seen in multiple recent studies as well as in the direct evidence of Congressional behavior, Congress is more responsive to the policy opinions and priorities of the affluent than to the general public, let alone those on the lower end of the income spectrum.
This leads directly into a discussion of the second argument: that the draft creates a "shared sacrifice."  As I just noted, Congress is more responsive to their more affluent constituents; however, this would not necessarily translate to anti-war sentiment among the elites.  The draft offered deferments to college students, who skew toward the upper end of the income spectrum.  Dick Cheney had five deferments during the Vietnam War.  George H. W. Bush was able to lighten the load on young Dubya.  And Mitt Romney journeyed to France as a missionary while millions of youth were sent to die in Vietnam.  The relation of the affluent and connected to the war always reminds me of the Creedence Clearwater Revival song"Fortunate Son".
Moreover, wars of the scale of Vietnam and Korea--or today, Iraq and Afghanistan--are not the only military actions in which the U.S. engages. Not too long before the implementation of the draft for World War I in the Selective Service Act of 1917, the U.S. Marines occupied Haiti, and Wilson ran military campaigns in Mexico. Neither was an act of national self-defenses; rather, they were primarily done for the protection of U.S. corporations. The following decade saw the Banana Wars, a series of occupations and police actions in Central America and the Caribbean, again for protection of corporate interests.  To have a non-volunteer force ready in each case the U.S. wanted to fight to protect corporate interests abroad, the U.S. would need not just a draft, but mandatory military service.  Although conservatives like David Brooks would extoll such mandatory military service as a democratic force bringing rich and poor together (so the rich can show their good character to the poor, of course) as the conservative forces argued before entry into WWI, mandatory military service is fundamentally anti-democratic.  The military is a rigid hierarchy that demands strict discipline and unquestioning obedience; it is authoritarian, not democratic, by design.  Mandatory military service, as the liberals and socialists argued back in WWI, denies individuals the liberty to freely pursue their own ends, and the requirement of service in an authoritarian institution is antithetical, even corrosive, to democracy.  Mandatory military service would not offer much of a deterrent to increased military engagement because, as the saying goes, when all you have is a hammer, everything looks like a nail.
I think that Sirota's piece missed a more important change in how the U.S. fights wars:  the end of the conscription of wealth.  The first income tax in the U.S. was levied to fight the Civil War.  In the lead-up to World War I, progressive forces demanding that the war be paid by income taxes beat conservative forces that preferred consumption taxes; if the government were to conscript the bodies of the workers, it had to conscript the wealth of the rich.  The Sixteenth Amendment had just been ratified four years prior, guaranteeing the constitutionality of the income tax.  Between 1916 and 1917, the United States experienced one of the largest single-year tax hikes in its history.  The marginal tax rate (for incomes above $2 million--roughly $36 million in 2013 dollars) jumped from 15% to 67%.  The marginal rate for incomes above $1 million (roughly $18 million in 2013 dollars) jumped from 13% to 65%.  Look at the chart linked above, and you can see just how steep the single-year increase was.  Moreover, the income tax was specifically designed to target the upper end of the spectrum:  the increases in marginal rate didn't begin until $5,000 (roughly $92,000 in 2013 dollars).  During World War II, the Revenue Act of 1942 raised taxes across the board.  It lowered the top income threshold from $5 million ($71.4 million in 2013 $$) to $200,000 ($2.85 million in 2013 $$) and raised the marginal rate by 7 points.   The corporate tax rate rose from 31% to 40%.  The lowest income tax rate was 19%--for income up to $2,000 ($28,500 roughly in 2013$$), and the increases were graduated to reach a top marginal rate of 88%.   Two years later, the Individual Income Tax Act of 1944 raised the tax rates again, with a new marginal rate of 91%, the highest it's ever been.
Since then, no president has raised income taxes to fund a war.  Tax rates were lowered slightly after World War II.  Truman did not directly conscript wealth when he conscripted men to fight to the Korean War---although, granted, tax rates were still quite similar to the World War II level.  In 1964, not long before escalating the war in Vietnam, LBJ passed a round of tax cuts with the Revenue Act of 1964.  The marginal tax rate fell from 91% to 70%, and the corporate tax rate fell from 52% to 48%.  The conscription of men saw no corresponding conscription of wealth for the sake of "shared sacrifice."  
The failure to conscript wealth to fight wars has become salient in the past decade amidst the country's growing debt due to the cost of war.  In July 2011, Bush passed the Economic Growth and Tax Relief Reconciliation Act of 2001 (Bush tax cuts, Round 1).  Two months later, after the attack on 9/11, Congress passed the AUMF, authorizing the war in Afghanistan.  Did Bush end his tax cuts in light of the high costs of his new "global war on terror"?  Of course not!  Two years later came the Jobs and Growth Tax Relief Reconciliation Act of 2003.  JGTRRA, also known as Bush Tax Cuts: Second Edition, was signed into law by George W. Bush on May 28, 2003.  Does spring 2003 sound familiar to you?  It should. Just two months earlier, on March 20, the U.S. attacked Baghdad, officially beginning the Iraq War.  George W. Bush inaugurated his war by cutting taxes, making sure that his campaign donors and war profiteers like Cheney would not suffer.  A Harvard study from earlier this year found that these two wars will end up costing American taxpayers between $4 trillion and $6 trillion.
As I noted earlier, I find it naive to believe that Congress or the President would be particularly responsive to public opposition to an intervention, regardless of whether or not we had a draft.  However, as I noted above as well, politicians do respond to their affluent constituents, and oh, how those constituents hate taxes.  For any hope of reducing U.S. militarism and imperial overreach--outside of the slow-moving process of cultural change and a corresponding push for institutional reform---we would have to reestablish the link between war and income taxation; we need to start conscripting wealth again.  Let's say, for instance, that every time the U.S. sent troops abroad, tax rates would automatically go up by x percent either across the board or just above a certain threshold.  For each additional month (or three months or six months), tax rates would continue to rise by a set interval and would do so until the troops return home.  If wealthy individuals saw their taxes go up month-by-month because of the U.S. military's meddling in other country's affairs, then we might see a faster response; think of how fast Congress responded to the mild inconvenience of the wealthy with the FAA quick fix.  I don't honestly believe that Congress would be bold enough or care about fiscal responsibility enough to ever legislate such mandated automatic increases; however, the conscription of wealth needs to enter back into the public debate and the legislative reality if we are to have greater hopes for curbing U.S. militarism.
**The reference to 90% of the national income made me curious about how large of a percentage goes to such purposes (the burden of past wars, the costs of present wars, and the preparation for and prevention of future wars)today.  When determining that total burden, one can't just include the total budget for Defense because "national security" spending works its way into many departmental budgets and also incurs costs in interest.  In the Columbia Journalism Review, David Cay Johnstson estimated an all-inclusive national security budget for 2013 of $1.3 trillion.  The estimated receipts from the personal income tax in 2013 are $1.6 trillion. In other words, one could hypothetically say that 81.25% of the income tax receipts fund war, the burden of wars past, and the fear of wars future. Highlight that fact the next time someone talks about how the "unsustainable" costs of Social Security and Medicare are "crowding out" other spending.

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