A GRAND TIME TO BE RICH AND POWERFUL
The Republicans in the House of Representatives last week passed yet another tax cut for the very rich at the expense of more pressing needs – and future generations.
In justifying it, they and their surrogates said it was necessary to keep the economy booming – and lauded the previous cuts as having brought the stock market back. Instead, of course, the Dow is now lower than it was when Bush began promising his tax cuts, and the economy is doing well on average – just as, on average, everyone in a homeless shelter is, on average, a multimillionaire when Bill Gates happens to be there visiting – but adjusted for inflation, reports Paul Krugman in The New York Times, median household income has fallen for the fifth year in a row.
They neglect to mention that in the wake of the modest Clinton/Gore tax hikes on the best off (but on no one else!), these things happened: the Dow trebled, median incomes steadily rose, poverty steadily fell, and deficits were turned into surpluses.
Sure, the 90% top bracket under Eisenhower was nuts, and sure Kennedy’s lowering it to 70% actually increased tax revenue (because it was slightly less crazy to pay the tax rather than risk losing 100% in a nutty tax shelter).
And sure, when Reagan cut the top bracket to 50% – still too high – tax revenues again rose, for the same reason.
But experience showed that lowering the rate to 28% overshot the mark – we began piling up this mountain of trillions of dollars in Republican debt. (By the time Bush leaves office, if he sticks it out to January 20, 2009, the National Debt will be nearly $10 trillion – of which $8 trillion or so will have been racked up by just three presidents: Reagan, Bush, and Bush.)
Meanwhile, experience showed that Clinton’s moving the top rate back up to 39.6% was just about right. Prosperity was steady and our budget began to balance.
- The final thing to say about this is that if we do need big tax cuts to keep the economy humming, how about giving them to the people who are actually struggling to heat their homes and educate their kids?Why not give a tax break to work instead of wealth?
My friend Alan Rogowsky points us here – “all this great stuff (JFK’s inaugural, Reagan’s ‘evil empire’ speech etc., etc.) . . . and it’s free!!!”
My dapper stepdad is 93 today. Is that cool or what? Happy birthday, Lew!
Tomorrow: Spaceship Earth
Quote of the Day
[It would be splendid if someday] economists could manage to get themselves thought of as humble, competent people, on a level with dentists.~John Maynard Keynes
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