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Seattle Taxing the Rich


Kshama Sawant is the first open socialist to be elected to Seattle City Council in over a century. She is an economics professor at Seattle Central Community College and a member of the American Federation of Teachers Local 1789. She was an activist in the Occupy Wall Street movement, and is a fighter for workers, women, LGBTQ people, and immigrants through her work in the organization Socialist Alternative.

JAISAL NOOR: Welcome to The Real News. I’m Jaisal Noor in Baltimore. “Tax the rich.” That was the rallying cry as the Seattle City Council on Monday unanimously passed an income tax for its wealthiest residents. Critics are vowing a legal challenge, but supporters like our next guest say the 2.25% tax on those earning more than a quarter of a million dollars or households earning more than half a million dollars will annually raise about $140 million every year, help fund social services, and perhaps lead to a lowering of some of Seattle’s other high taxes, which are considered some of the most regressive in the country.

Now joining us to discuss this is the bill’s cosponsor, Kshama Sawant. She’s the first socialist elected to Seattle’s City Council in over a century. Thanks so much for joining us.

KSHAMA SAWANT: Thank you for having me.

JAISAL NOOR: I wanted to first get your response to critics who say this is unconstitutional and it’s illegal in the state of Washington because no income tax is allowed in Washington. Give us your response to that.

KSHAMA SAWANT: First of all, Jaisal, if you don’t mind I just wanted to give a certain background context for your viewers about what this actually means. We are in an era of Donald Trump, a racist, misogynist bigot who’s in the White House who’s vowed a war against workers and labor unions and is a billionaire himself and has an administration that is wealthier than any other US presidential administration in history. At that same moment, we are seeing incredible victories being won by social movements organized by workers and young people. For example, 15 Now, the movement that we started in Seattle, that Socialist Alternative started in Seattle, has now gone nationwide. Just less than a week ago, 15 Now Minnesota just won a landmark victory with winning $15 an hour for Minneapolis workers. This is the first Midwestern state to win $15 an hour.

Yesterday in Seattle, as you said, Jaisal, we just won a tax on Seattle’s rich. This was won because of the movement of working people, as I said, and led by socialists and other activists. If you look at the state of Washington, where Seattle is, Washington has the most regressive tax system in the entire nation. For decades, a ferocious, punishing burden of tax revenues has been put on the shoulders of the poorest people, of lower-income people, of middle-class households, while the richest corporations, like Boeing and Microsoft, make out like bandits, not to mention the billionaire and millionaire super-wealthy households. This tax is extremely important.

The state law at this moment is at best ambiguous about it. We know there will be a lawsuit by Republicans, by the right wing, by the billionaire class, but the point is, throughout history we’ve seen that where you have unjust laws, you can’t … If you have a different vision of society, you can’t just sit back and say, “Well, we have an unjust law. What can you do?” No. The example of abortion rights, civil rights, marriage equality, all of these examples show that when grassroots activists take to the street, build fighting movement in their cities and in their states, their supreme court will follow, so we want to challenge this in the court.

JAISAL NOOR: Critics say this is going to drive away the wealthy from Seattle. I wanted to play a clip of Fox Business News’s Stuart Varney. He had some choice words for the bill. Let’s give it a listen.

STUART VARNEY: Can we be clear? This tax is punitive. It is punishment for success, and it won’t work. Remember, Maryland imposed a millionaire’s tax some years ago. That didn’t work. The rich simply moved. Remember also that Seattle imposed a much bigger, higher minimum wage. That led to employees working fewer hours and taking home less pay. The poor are no better off. In fact, they lose ground. Youth unemployment goes through the roof. Businesses move and hire fewer people, and the rich move to Texas or Florida.

JAISAL NOOR: That’s Fox Business News. That is the outlet for the right-wing elite. They’re saying it’s not going to work. Give us your response.

KSHAMA SAWANT: It’s not surprising that the right wing and the business class and wealthy people have this completely false, as far as I’m concerned, false narrative of capitalism. He says this is going to be punitive? No. Actually, what we have right now, the status quo under capitalism is that working people, young people, the poor, and the middle class are punished every single day, and they’re the ones that are responsible for the success, for productivity, for the creation of wealth. Who creates the wealth? It’s workers who go to work every day and make our cities run and get so little in return that they are barely able to pay the skyrocketing rents. They’re barely able to pay for food, clothing, and healthcare for their families.

As far as this economic argument that Stuart Varney and other right-wing pundits are making, I speak not only as a socialist right now but as a PhD economist, and I can tell you that there is absolutely zero evidence for this voodoo economics that somehow minimum-wage increases have resulted in economic destruction or that tax on wealthy people will somehow result in all kinds of negative consequences. As a matter of fact, all the evidence in economic studies, statistical evidence, shows that minimum wage increases end up lifting workers out of poverty, and that a tax on millionaires throughout history and geographically throughout the world has been a social democratic measure under capitalism through which we can fund the basic needs, the basic necessities of the millions of working people who go to work every day and do not take home the lion’s share of the wealth in our system.

But I will make one more statement, Jaisal. As a socialist, the reality is this. This is a bitter reality, but it’s absolutely necessary for us as social movements to confront that the truth is that, even though minimum wage increases, taxes on the rich, and such reforms will not have any direct negative impact on the economy, the reality is that the capitalist class, the bosses, those who have an interest in keeping this exploitative and oppressive system alive, they will find other ways of undercutting our successes. It is not going to be enough simply to fight for reforms like minimum wage increases or like taxing the rich. In fact, we have to learn the lesson not only from the past but also what’s happening in other countries.

I’ll give you an example. The National Health Service in Britain has been a brilliant example of publicly funded, affordable, quality healthcare, but by grossly underfunding it decade after decade, both by Tories and by the Blairite Labour politicians, the NHS right now is a shell of what it could be. It becomes a self-fulfilling prophecy. If you’re the boss, you underfund the program and you say, “Oh, it doesn’t work, so it needs to be taken back.” Same with minimum wage increases, taxes on the rich, and any other reform. They will find, the capitalist class, the ruling class will find every other avenue to undercut the reforms that we do win.

That is why my appeal to everybody who’s watching this is not only should we first of all get involved in fighting movements to win these reforms  let’s win a $15 minimum wage federally, let’s win a tax on the rich and tax on big corporations to fund affordable and free public education, affordable Medicare for all, and all of those gains  but let’s go beyond that and fight for a different kind of system than capitalism, because as long as the edifice of capitalism remains intact, we will be forced to continue fighting for the same reforms over and over again.

JAISAL NOOR: This speaks to your point, but the other reason I wanted to play that clip is because it’s not just right-wing conservative Republicans that are opposing these measures. For example, in Baltimore, the City Council, which is unanimously Democrat, earlier this year passed a $15 minimum wage bill, but the Mayor of Baltimore, who’s a Democrat, who campaigned on promising to sign that legislation when it reached her desk, she vetoed it. She vetoed it because she listened to those same conservative arguments. I wanted to ask you, the rest of the City Council in Seattle are Democrats as well. Talk about how you won them over to supporting this measure and the other measures, like the $15 minimum wage that you’ve championed.

KSHAMA SAWANT: Yes, Jaisal, you’re absolutely right, and I appreciate you mentioning what happened in Baltimore, where the Democratic Mayor vetoed the $15 wage. A similar example we saw only recently, where there was a grassroots movement for single payer healthcare in the state of California. There were many rank-and-file just regular people who identify as Democratic Party supporters who fought for it. There were left-wing Democratic politicians who supported it. Then, at the end of the day, the bill was pushed back and killed by the Democratic Speaker of the House.

We see example after example where, despite the differences, the real differences between the Democrats and Republicans, at the end of the day, while the Democrats pay lip service, the corporate Democratic establishment pays lip service to the needs of working class people, at the end of the day their real allegiance and loyalty is to big business, to the super wealthy, and to Wall Street.

To give you a counter-example, as you said, we won Tax the Rich here, we won 15 here, and, as I said, recently Minneapolis won 15. How did they win that? They don’t have a socialist on the City Council even, yet, even though we have Ginger Jentzen from Socialist Alternative running now for City Council from Ward 3. But the reason they won in Minneapolis is the same reason that we won 15 here, is that we built 15 Now campaign, which is an independent grassroots campaign, which means it is independent not only of big business but it is also independent of the politicians that support big business. You build a momentum strong enough that gets thousands of people out on the streets, you change opinions, and polls indicate the strong support for 15.

It is under that kind of pressure that the corporate politicians of City Hall in Minneapolis  again, all Democrats, except for I think one Green Party Council Member  they all voted yes because they were forced to. Only weeks before the City Council 15 Now vote in Minneapolis, they were hesitating on it, and the reason we won that was because we built a grassroots campaign, like we did here. Tax the Rich, we won that for the same reason.

Ever since I ran my first campaign for City Council in 2013 as an open Socialist vowing to take the average worker’s wage and not taking a penny of corporate donations, it’s since then that we have been fighting for Tax the Rich. We raised it strongly on our campaign banner in 2015 and during our reelection. This year there’s been an incredible coalition of organizations, including the labor movement, through a [inaudible 00:11:42] Seattle effort in Seattle that we won this.

Other members here, even the corporate council members, voted yes on it for two reasons. One is that it’s now become too politically expensive for them to oppose, because they will be called out and it will be risky for their own reelections. But secondly, it’s also, you have to understand that the ruling class and its political representatives, they pick and choose battles. They recognize that, because the right wing … The Democratic corporate politicians in Seattle recognize that there will be a lawsuit in the state supreme court against this law, so why not just get the credibility of the movement by saying, “I support it”? Because you know it’s going to be challenged anyway. I strongly feel that the corporate politicians in the city have been talking to the business representatives, the Chamber representatives that they hobnob with, and telling them, “Don’t worry, I’ll vote yes on this, but it’s going to be challenged in the court.”

The lesson to us is not only that this victory shows we can win, but also we should not get hoodwinked by this process and derive a lesson that we can just build a pressure group kind of approach where we build a campaign but our main goal is to let politicians know we’re watching them and they should vote the right way. That goes only so far. That is absolutely necessary, but that’s only step one. We need to go beyond that.

Our movements need to be willing to break away and we need to break away from an organizing model where we try to build relationships with individual corporate politicians, and instead tell them, “We’re fighting for workers. If you’re on the side of workers, you will vote the way we want. We are going to run independent candidates of ourselves that represent the movement.” We need that kind of deeper challenge, and I hope that we can take the victories from Seattle and elsewhere towards that effort.

JAISAL NOOR: Thank you so much for joining us.

KSHAMA SAWANT: Thank you, Jaisal.

JAISAL NOOR: You can go to therealnews.com for all of our coverage on these important issues. Thank you so much for joining us.

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