Bill Bradley Slams McCain's Tax Rant

"We need a new ethic of connectedness," says former Senator Bradley on why he supports Barack Obama and his tax policies

By Shoshana Zuboff

Senator John McCain and Governor Sarah Palin are working hard to gin up McCarthy-era fears, equating a modest tax increase for wealthy households and corporations with "socialism." This seems surreal when the U.S. General Accounting Office's August report found that two-thirds of all American corporations paid no federal income taxes between 1999 and 2005.

New York University economist Edward Wolff's recent analysis of Federal Reserve data shows that the top 5% of U.S. households saw their wealth rise by an average of 92% between 1983 and 2004. Those in the middle gained only 27%, and those at the bottom lost 59%. Another startling statistic: 69% of all nonhome wealth is concentrated in the top 5% of households. What kinds of risks do we incur as a society when the majority are left to fight over a shrinking pie?

I turned to former Senator Bill Bradley (D-N.J., 1979-1997) for a reality check. An early supporter of Senator Barack Obama's campaign for the White House, Senator Bradley has experienced these issues from both sides of the table. He has been a serious statesman and now boasts a successful career in the private sector as a managing director of the investment firm Allen & Company. While in the Senate, Bradley worked closely with Republican colleagues as a major sponsor of the Tax Reform Act of 1986 which significantly cut tax rates and eliminated loopholes. But he was also a champion of issues related to health care, education, and child poverty—as well as a champion athlete on the basketball court. I recently spoke with Bradley in his Manhattan office. Edited excerpts of our conversation follow:

John McCain and Sarah Palin say it's not patriotic for wealthy individuals and companies to pay more in taxes. They say that it's wrong to "spread the wealth" with this kind of progressive tax structure. Does this argument have any merit?

Part of the American dream is to be able to go as high as your abilities will take you and be compensated to do that. The answer here is not to say that people should not make a lot of money. But should the people who are making more money pay more taxes? Yes, but the key lies in understanding why. There are certain needs that the society has for health care, education, pensions, etc., and everybody's got to contribute according to their ability to pay. If you just raise the top rates for Americans, you can't get enough money to do all those things.

You have to see how business competitiveness is connected with how we decide to provide for all Americans. We subsidize business with about $160 billion a year for health care. Clearly that's not working. Put on top of that the costs for plaintiff lawsuits: another $230 billion a year that business must shoulder. Then consider that the economic battles of tomorrow will be fought on the basis of the education we provide today. We have 2.9 million public school teachers, and about a third of them will retire in the next five to 10 years. Who goes into those classrooms will determine the kind of economy we have. Will we have enough bright people to staff that economy at every level, or will it increasingly be an economy with a few bright people at the top and lower skills down the line?

I think more business people have come to the realization that what has been seen as "liberal Democratic policy" might actually be vital for making America more competitive in the long term—whether it's having government take over more of health care, education systems that actually work, or assuring that pensions are adequate for people after they've worked 40 years.

Surveys show that most Americans see the business community as having served its own interests at the expense of the country, creating a winner-take-all society. Do you see signs of the kind of leadership in the private sector that can forge a new role for American business?

What we really need is an ethic of connectedness. The bonds of community have loosened, and the connectedness that people feel has decreased. Business leaders need to realize that the future of your employee is related to your own future. There's been a view increasingly over the last 25 years that you can exist as an isolated individual in a community that will support you, even though you don't support the community.