Eat the Rich
Anyone who listens for a moment to all those earnest Republican talking heads that have been pushing GOP budget proposals, couldn’t help but walk away from the TV thinking that America, under that crazy Marxist Dictator Obama and those looney pinko Democrats, has become an absolute confiscatory tax hell. I suspect we could almost pay off our deficit if we just had a dollar for every time Boehner and the boys have said: “We don’t have a undertaxing problem, we have an overspending problem.” But the fact is, Republicans are not telling you what is commonly known as: “the truth.”
There are a number of ways to measure tax burdens. One is to look at the highest marginal tax rate. And currently, the income tax rates for the wealthiest Americans are at historic lows. The top marginal tax rate in the United States is now 35 percent.
Since 1932, there have only been five years in which the top marginal tax rate was lower than that. They all occurred during the Reagan/Bush years. And they were all years in which the deficit absolutely skyrocketed. The GOP claims that lowering tax rates would bring in more tax revenues had turned out to be wrong. Way wrong. And that is why when Republican President George H. W. Bush first took office after Reagan he had to break his famous pledge of “no new taxes.” He raised the top rate to a little more than 39 percent.
The broadest measure of the tax rate, according to Bruce Barlett, a senior policy analyst in the Reagan White House, is the total federal revenues divided by the gross domestic product. According to a recent column by Reagan Republican Bartlett in the New York Times: “By this measure, federal taxes are at their lowest level in more than 60 years.”
According to another study, published in USA Today, federal, state and local income taxes combined only consumed 9.2 percent of all personal income in 2009, the lowest rate since 1950.
Now lets look at another important measure of the economy. Back in 2007, a time which many of the well-heeled now refer to as “My Favorite Year,” the New York Times ran a story about how income inequality in the United States had risen to a level not seen since the Great Depression. Not much reason to believe that it is any better today.
And the most recent score for the U.S. on the Gini index (a widely used measure of income inequality) was .468. In the CIA World Factbook a score of .468 would rank the US as about the 35th most unequal country in the world. When it comes to income inequality, the U.S. is now right behind Ecuador and just ahead of Rawanda. No offense to those countries, but they do not rank very high on most people’s list of dream destinations or bastions of economic opportunity.
And now, in the face of this corrosive inequality, and despite the historically low tax rates for the most fortunate among us, the GOP wants to slash social programs including Medicare and Medicaid, while keeping the Bush Tax cuts for the wealthy, preserving the tax loopholes for big oil, and lowering the top marginal rate down to 25 percent, the rate that existed in 1929.
Back in 1929, during the Great Depression, the soaring inequality, the pain and the dislocation experienced by so many resulted in a level of seething white hot anger and social unrest that caused many people to fear for the stability of our Democracy and for our very way of life. Some people think America came pretty close to just flipping out. I suspect that, if today’s mobilizing social media tools existed back then, the U.S. could have had its own “Cairo moment.” Imagine for a moment, the Aerosmith video Eat the Rich going viral as an anthem of the disaffected and disenfranchised, and Soylent Green as Reality TV, featuring Donald Trump. On the menu. It would of course solve nothing to eat the rich. Except maybe improve cable TV.
So, call me a sentimental fool, but I say we save the rich from themselves. And raise their taxes.