Peggy Noonan and the Beleaguered 1 Percent

What irritates me is the extent to which Noonan is still out of touch with reality when it comes to the Republican brand. As long as Republicans can't see that people making $400,000 a year are actually rich, they will have a hard time building a new constituency for their party.
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Peggy Noonan, former Reagan speechwriter and current Wall Street Journal columnist, thinks Republicans need to step up their game. Actually, her preferred metaphor has something to do with "pirate time," which presumably implies political derring-do and all that.

Ultimately, however, what Noonan's really urging is a fundamental rethinking of the Republican brand. Or so she says. In fact, she clings to a good chunk of the old GOP brand -- the part that worries touchingly about the hurt feelings and lightened wallets of poor working stiffs making a measly $400,000 a year.

The tax hikes approved earlier this month, Noonan writes, were "a blow to the gut" for this sad, beleaguered cohort. These are just regular folks, apparently, not self-indulgent fat cats: she calls them the "not-actually-rich-but-formally-declared-rich."

Seriously? Under what skewed interpretation of income distribution data are we going to avoid calling these people rich? By most reckonings, $400,000 in annual income lands someone in the top 1 percent or so. That doesn't qualify as rich?

Let's set aside the wisdom or fairness of raising taxes on this group of people. I'm just talking about reality here. By any measure -- and I mean any measure -- people making over $400k are very, very rich. Saying they aren't just perpetuates the worst elements of the current GOP brand -- the part that makes Republicans seem like "lackeys of the rich" (Noonan's terminology, not mine).

Noonan tells Republicans to "reorient yourselves." Stealing a line from Democratic rhetoric, she urges the GOP to "declare for Main Street over Wall Street." Call me crazy, but since when does someone making $400,000 a year qualify as "Main Street"?

To be fair, Noonan does break with GOP tax orthodoxy in some important ways. She somehow, sorta, kinda seems to endorse the late, soon-to-be-lamented payroll tax cut. Or at least she chortles over the blowback that Democrats will encounter when working Americans wake up to their smaller paychecks in this post-cliff world.

More important, Noonan urges Republicans to go after the carried interest tax preference. Apparently, some hedge fund manager somewhere did something mean to Noonan, because she gives these guys no quarter.

Which is all well and good -- I agree that Republicans should oppose the preference for carried interest. But Noonan conspicuously refuses to carry the logic of her anti-Wall Street argument to the capital gains preference more generally. Fair enough. But in Noonan's "pirate" world there would still be plenty of billionaires getting taxed at far lower rates than those poor working stiffs pulling in a measly half million a year.

Snarkiness aside, I don't begrudge Noonan her fondness for the capital gains preference: there are plausible arguments to be made for it. Nor do I think her opposition to rate hikes on the rich is totally crazy. I disagree with her on both counts, but reasonable people can disagree about such things.

But what irritates me is the extent to which Noonan is still out of touch with reality when it comes to the Republican brand. As long as Republicans can't see that people making $400,000 a year are actually rich, they will have a hard time building a new constituency for their party. Which is a shame, because America needs a reasonable, realistic conservative party. Good things come from the interplay of two parties with distinct but not deranged agendas.

Unfortunately, the first step to getting that sort of conservative party is simply acknowledging some hard realities about the world we live in. Starting with who's rich, who isn't, and what we should do (if anything) about that situation.

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