Abraham Lincoln’s wartime taxes included a tax on dividend income. Theodore Roosevelt sought a progressive tax on inherited fortunes. Dwight Eisenhower supported taxing excess wartime profits. Richard Nixon raised the upper end of the tax rate tables for unearned income. In 1986, Ronald Reagan made certain that the top rate for stock market income was the same as that for earned income, eliminating the preference for capital gains.
Only two Presidents have called for drastic cuts and/or elimination of taxes on investments—capital gains and dividends—for individual taxpayers. Both of them are named Bush.
The Bushes seem to understand no other class of income or wealth. If taxes are to be cut, then, they cut taxes on the only sort of income they know. What does it matter that such cuts benefit almost exclusively them and their fellow big investors? What does it matter that the real beneficiaries of cutting the estate tax are the moneyed families like the Bushes, not those mythological “family farmers” used to cynically sell the idea of repeal? Meanwhile, there’s no relief on the horizon from payroll taxes—the ones paid by you and me. Even unemployment benefits are taxed as ordinary income, with no tax breaks to be seen. Then there’s the 6.2% Old-Age, Survivors, and Disability Insurance (OASDI) tax, aka Social Security tax, which applies only to the first $87,000 of wages. Which means, for example, that Texas Rangers shortstop Alex Rodriguez stops paying into OASDI after six innings of his Opening Day game, making the effective OASDI tax rate on ARod’s baseball salary a mere 0.02%.
Kevin Phillips made his reputation as a political strategist while building Nixon’s razor-thin 1968 victory margin. By the early 1990s, he had moved into a more independent and iconoclastic position as the author of The Politics of Rich and Poor, a topic that, with his new book, he has placed in its historical context as a driver of American politics throughout our nation’s history. I respect his viewpoint, that of an interested and knowledgeable observer whose focus isn’t necessarily on the immediacy of day-to-day political posturing.
Among the gems in this article:
For those who ever believed in it, Washington “compassionate conservatism” just took off its mask.
Its centerpiece, costing $364 billion of the $674 billion to be spent over 10 years, is to reduce or end taxation of dividends, some 40 percent of which annually goes to the top 1 percent of wealthy Americans. What this complicated proposal would stimulate is not the workaday economy but the already huge gap between the wealthiest Americans and everyone else.
Still, you have to admire GOP chutzpah. Boldness often pays. Republicans are gambling that ordinary Americans are too numb or too dumb—either one works—to go beyond the 20-second sound bites to see who gets the meringue and who gets the filet mignon. They’re gambling that John and Jane Q. Public won’t comprehend a thinly disguised bailout of upper-income stock investors as another round of old GOP trickle-down economics.
As Bush fiscal policy suns itself in the mentality of Coolidge-Hoover-era Treasury Secretary [Andrew] Mellon, it disdains the better legacy of other GOP presidents.
If [the Democrats]’re afraid to fight under the old Democratic banners of Jefferson, Jackson, FDR, and Truman, this time they can invoke the Republican fiscal precedents of Lincoln, Teddy Roosevelt, Eisenhower, Nixon, and Reagan.
Numb or dumb… That’s what we have to fight.
The administration is operating the Saddam war and the color alerts in no small part to overwhelm our senses, to keep us juggling so many balls of indignation and outrage that some of the horrors they envision will sneak past us. Their ruinous fiscal policy is one of the worst, along with tearing away and tearing up the Constitution. Read Kevin Phillips for more information.
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Posted by N in Seattle on 02/17 at 02:50 PM
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