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The G.D.P. Question
By BOB PACKWOODWashington
PRESIDENT OBAMA’S plan to increase the tax rate on those making more than $250,000 has further fueled a national debate about the virtue of raising taxes on the “rich.” But this debate puts the cart before the horse. The real question is not how much we want to tax, but how much we want to spend.
The real question is what kind of nation do we want to be. I grant the question encapsulates as many issues as the options Mr. Packwood would have us limit ourselves to.
- Will we continue to have "Let The Buyer Beware" as the slogan that represents our economy?
- Will we continue to privilege unearned income over earned income?
- Will humans have a collective that represents their interests against the corporate collectives in the adversarial game called the United States Economy?
It strikes me, though, that Mr. Packwood’s op-ed assumes a level of agreement on the type of nation we intend to be that simply isn’t there.
We’re having a lot…a LOT…of proxy debates when we should just meet it at the marrow.
3 Comments
Packwood lost all authority he ever had years ago.
The question is why are they sending THIS hack out to front their question?
Because the question he’s asking is so politically toxic only those with no remaining political capital can be sent out to ask it?
For some very cynical and ruthless GOP players, this polemic is a kind of scare tactic that is part of a broader long run strategy: squeeze the middle class and then scare them with more ‘big government’ Democrat taxes. People like Norquist, who I think is either depraved or mad, have said this is their strategy.
The very rich have gotten the vast majority of tax reform/reduction benefits not only because they are a favored constituency, but because of cynical and immoral political calculation. Denying a more equitable distribution of tax relief, even among the upper quartile of the income distribution, would result in a less resentful, less fearful, less insecure, upper middle class.
This is another reason for the rabid opposition to, and dead-ender assault on, broad social insurance programs in the U.S.that would extend up into the middle class. The fear is that the middle class will find social insurance to their liking and social insurance policies that work (which will be a significant fraction of those adopted). Therefore the basic core of such programs will never be repealed, even if they need to be modified and tweaked periodically.
This strategic political calculation may have also been the reason for the inept and innumerate and trivial pursuit nitpicking style attack on recent sound research on the recent increase in income inequality. Too bad that attack had the disadvantage of being dead wrong. And it is nice that one of the researchers, Emmanuel Saez just won himself a hight toned official scholarly prize (John Bates Clarke Medal) to give his work more credibility.
Whenever I see this kind of tired polemic, I remember the GOP divide and conquer strategy for the middle class.
Oops. I forgot my main point. With the current income distribution, and tax structure, Packwood has a point, and he uses this point to scare middle and upper middle class families who feel that their social position and modest wealth is vulnerable to attack by social democratic policies.
However, if we had a more even pre-tax income distribution, the the income tax could be less progressive, and with a stronger social insurnace safety net, less burdensome on the middle class.
Now is a good time to press this point. The research on the increase in income inequality has held up to attack. And, it is now clear, IMHO, that much of the gain in the top 1% and higher has been due to crony capitalism (in the financial industry), rather than any return to productive activity for the economy as a whole.
Of course, economic thought in the U.S. has become so confused that being part of a cartel that buys government favors so your industry can appropriate loads of cash, and then fighting like demons over who get it, is considered obviously a productive acticity. So, we have work to do in correcting this kind of thinking.