Could progressives find allies in the Tea Party?

Wednesday, April 14, 2010

This Thursday, thousands of Tea Partyers will mass in Washington and across the country. Rep. Michele Bachmann (R-Minn.), former Alaska governor Sarah Palin (R) and others will sound strident alarms about government overreach. There will be no shortage of fury about the debt, deficits and taxes.

So how do we move beyond this mud fight and have a sane conversation about taxes, the proper role of government and how to rebuild our economy?

We certainly won't get there with the extremes of the Tea Party dominating the already suffocatingly narrow media conversation with a message of "shrink government, cut taxes and President Obama is taking your freedom." What you're unlikely to hear from that -- and what a newly formed group called The Other 95% is doing to counter media misinformation -- is that 95 percent of Americans received a tax cut under the Obama administration, but only 12 percent of Americans know it. Among the Tea Partyers, only 2 percent realize that during the administration taxes have decreased for most Americans -- 44 percent believe taxes have gone up, according to a recent CBS News/New York Times poll.

Instead of misdirected rage, what we really need is to promote clear thinking about how to redirect the shared grievances of progressives and the more sensible Tea Partyers into a productive politics. While there are many in this somewhat inchoate Tea Party movement who are rabidly anti-government, view Obama as the enemy, show racially tinged animus and are unreachable, there are others with whom progressives can constructively engage.

We can agree that we've been borrowing recklessly from our grandchildren -- we borrowed $700 billion over the past eight years to give the rich tax breaks while fighting two wars on borrowed money. We also share the belief that the middle class and its standard of living have been under attack -- for 30 years real wages have been stagnant while globalization, deregulation and tax policy have helped the rich get richer. There is shared outrage that Wall Street bankers and speculators are squeezing us at every turn with fees, charges, monopoly control over markets and too-big-to-fail status -- and they won't stop unless we organize to stop them.

We can come together in outrage over figures such as those documented in a just-published report from Wealth for the Common Good -- a "network of business leaders, high-income households and partners supporting public policies that promote shared prosperity and fair taxation." The paper is a tight account of how enormous tax cuts over the last 50 years have favored the wealthiest Americans, while the middle class has gotten the shaft.

For example, the top 0.1 percent of U.S. taxpayers saw their share of income paid in total federal taxes drop from 60 percent in 1960 to 33.6 percent in 2004. In contrast, taxpayers in the middle saw an increase -- they paid 15.9 percent of their incomes in total federal taxes in 1960 and pay 16.1 percent now. It's been an even bigger bonanza for the top 400 income-earners -- they've seen their share of income paid in federal income tax alone plummet from 51.2 percent in 1955 to 16.6 percent in 2007. When the wealthy and corporations (two-thirds of U.S. corporations paid zero federal income taxes between 1998 and 2005) don't pay their fair share, the bill gets passed onto the middle class, the debt grows, and our roads, mass transit, schools and veterans services -- to name just a few things -- suffer.

How can we reverse what the report calls the Great Tax Shift to create a more just system? By ending the Bush tax cuts for households earning more than $250,000; carefully structuring rate reform on dividends and capital gains income -- currently taxed at 15 percent -- which flows overwhelmingly to wealthier Americans; putting a progressive estate tax on estates worth over $2 million or $4 million for a couple -- taxing no more than one in every 200 estates; ending overseas tax havens used by the likes of Citigroup and Best Buy; adding a modest financial transaction tax to discourage rapid speculative trading of stocks; and creating a 50 percent tax bracket for income over $2 million.

But we're a long way from these reforms -- the Senate can't even get its act together to tax hedge fund managers like normal working people. That's why Warren Buffett, who supports closing such loopholes, likes to remind people that he pays a lower rate than his secretary.

This is a moment -- though hard to glimpse through the fury and anger in our hyper-polarized country -- where there are common grievances among millions of Americans. Those grievances revolve around a system that consistently favors the rich and powerful at the expense of ordinary individuals and families. If we could reckon with some of our similarities, we might truly build a broad-based coalition for economic change.

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