Last week in my Friday rant I came back again to my suggestion that we keep our eye on the ball. The ball is tax rates. The Tea Party gets all the attention, and the blame, and they deserve a healthy helping. But the Tea Party people are really pawns in the larger game. They have been maneuvered by a crafted diet of Fox into being the berserkers in the defense of tax cuts for the rich. This will go down as one of the most brilliant and successful manipulations of populism in history. But I am here to return your eye to the ball. It’s time to roll back some of the huge tax cuts we have handed the wealthy.
And what would we get for that? Here’s what you would get for that. You’d get the Grand Bargain that all ‘serious commenters’ have been having the vapors over. Yes you would. The sages say a grand bargain is essential to the survival of the realm, but somehow they get all squishy and vague when it comes time to insist that the rich be a serious part of the solution. Oh they are laser-focus about deficits, but prove HIGHLY distractable about tax rates. But if you did get your Grand Bargain, all of American politics would return to sanity because the never-ending World War Twelve about DEFICITS would be over. Then maybe we could have a normal conversation, a normal politics, a normal government, and a normal country.
Here’s what else you might get. A first step toward to being a Middle Class Country again. I know, I know, I’ve read the reports; tax rates aren’t the main driver of wealth inequality. Technology and Globalization are. (I will only pause here to remind you that reports also instructed us that Technology and Globalization would be GOOD for middle class jobs). But back to my train of thought. Tax rates may not be the cause of the new hallucinatory split between the rich and the rest, but one can envision them being a start to correcting it. Just like the way we did it in the 20th Century. That’s right! The Golden Age of American prosperity. Remember those legendary 90% marginal rates? Not legends! Law of the land here in the good old USA at one time. As it happens a very prosperous time for ordinary workers! And whether or not anybody literally paid that 90%, it was a rather persuasive economic and social signal that America wasn’t in the business of cheering somebody adding yet another billion or ten to their personal wealth when the rest were in a grinding struggle against losing more ground. We had different ideas about what constituted a healthy society.
But then we slashed the upper rates because we were told we needed to foster ‘capital formation.’ Okay. The capital is in giant piles now, ‘sitting on the sidelines’. Mission accomplished! Capital formed! Now let’s get back to ‘healthy middle class formation.’