So, is the economy your number one issue in the upcoming elections? Sick and tired of the way the government takes too much of your money in taxes and gives too little back in the way of economic stability and security? Probably a safe bet that across all political party lines, the answers to both those questions would be a resounding "Yes!" for a whole lot of people. Most Independents, Republicans and Democrats would agree that there's a big problem with our American tax system. What the causes of the problem are and what the best solutions might be, well that's another story.
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The Republican and Tea Parties advocate keeping everybody's income taxes low or cutting them all equally, which based on simple math benefits those with higher incomes the most. The GOP also wants to do away with estate taxes (which they deride as "death taxes") on fortunes that wealthy folks want to leave to their families, and they want to reduce or eliminate taxes on stock market and real estate deals that bring people profits. And then they want to lower taxes equally across the board on corporate income, which again, based on that math, would help big businesses with big profits infinitely more than it would help small businesses struggling to stay afloat.
If all of that sounds familiar, it's because those are proposals that were advanced or implemented to differing degrees from 2000-2008 by the Bush-Cheney administration. You can judge or research for yourself how well that approach to tax policy worked, but let's face it, all evidence since December 2008 would indicate it didn't work very well at all.
It may be of historical interest to some at this point to note that in 1918, the top tax rate for people with incomes over a million dollars was raised to 77%, to help finance WW I. It was lowered to 58 percent in 1922, helping usher in the booming, "Roaring Twenties". But then it was lowered to 25 % a few years later. By 1929, the richest one percent of Americans owned forty percent of the nation's wealth. The Middle Class had shrunk to 15-20 percent of the country. And then came economic collapse and The Great Depression.
Things that make you go Hmmm...but, Back To The Future.
The resounding defeat of the Republican Party in 2008 gave angry Americans of every political persuasion a window of opportunity to climb through together, towards a more fair if not perfect modern-day tax system. But some were so stressed out by the deepening Recession that they leaped into the outstretched arms of professional manipulators and ideological extremists, missing the common middle ground entirely. What resulted is the great irony of the Tea Party movement, the way it sprang up in no small measure as an organic response to an unjust tax system but then, before the truth of what was actually so unjust could become clear and sink in, fell prey to power & profit seekers determined to protect and preserve that unjust system at any cost. Distraction, deception and divisiveness were their weapons of choice, and they knew how to use them.
They promoted and cultivated narrow self-interest and an "Us vs. Them" mentality in people, casting as enemies the President and U.S. government, portraying unemployed and working poor Americans as tax-grabbing villains. They used political, religious, racial, ethnic differences and contrasting viewpoints on personal freedom issues like abortion and gay rights to divide and conquer what might have been a genuine non-partisan tax revolt, before it could ever get off the ground.
And so the Tea Party to date represents an enormous wasted opportunity, a missed chance to force populist tax reform on a stubbornly reform-resistant club of wealthy folks who call themselves the U.S. Congress - a club that has facilitated reconstruction of the federal tax system over the last 30 years so that 98 percent of us get screwed over in order to further enrich the richest two percent of Americans...the ones best equipped to make the largest contributions to congressional candidates, need I mention.
Regardless of propaganda from Fox News, conservative radio and websites, fair tax policies have nothing to do with "class warfare" or Socialism. In fact, in the 1950's when the tax rate on personal income for the richest Americans was over ninety-percent, we had Republican ex-General Eisenhower as president, and were engaged in an all-out "Cold War" against communism. But people understood and accepted that it was in the best interests of the nation as a whole, as a giant interdependent community, to tax the accumulation and concentration of great wealth at a very high level. The country prospered, including rich people and corporations.
But starting with President Johnson in the 1960s, that ninety-percent tax rate began to shrink. The power and influence of wealthy corporations and individuals over the electoral and legislative process grew. Still, the top rate remained at 70 percent from 1965 until...drum roll...until Ronald Reagan became president in 1980. In the wake of some very tough times in the late 1970s, he was able to sell a complete reversal of what had been long-standing and generally effective American tax policy, leaving behind a top rate of only 33-percent when he was done - along with a huge and widening gap between the rich, and everybody else.
President Clinton got that top tax rate back up to almost 40 percent in the 1990's, balanced the budget, and left behind a huge federal surplus when he was done in 2000. There were still way too many have-nots in society, way too much economic inequity, but it was a step in the right direction, and the results speak to that fact.
So how can we now allow Congress to extend the Bush tax cut for the rich that lowered their rate back down to 35% in 2003? Doing that for the folks who are already rich makes it that much harder to cut taxes for everybody else, something we can all agree we'd like to see happen, right? How can we not insist that Congress let that Bush tax cut expire in January as intended, then demand that the top rate on the 98th-99th richest percentile of Americans be raised up to 45%, then insist that the rate on people with incomes over a million bucks go to 50%, where it was for years under Reagan? Then maybe we can cut taxes even more for middle and lower income people who actually need the help.
We've got to deal with facts here folks, not dreams. Besides, history demonstrates that everyone can still pursue their own version of the American Dream, including the one where you hit the lottery and get rich beyond your wildest dreams - while still having responsibly high tax rates on the top two percentiles of our wealthiest citizens, rates that help begin to restore social and economic stability for most everybody else. That too, is an American Dream worth embracing, supporting, and actively advancing. Don't you think?