Smash and grab. Take all you can and make a run for it.
Just like common looters during a riot, President Donald Trump and the GOP lapdogs of the wealthy are seeking to loot the nation’s public treasury by granting lavish tax cuts to themselves.
Under Trump's proposal, a whopping 80 percent of the tax cuts are estimated to go to the top 1 percent of earners. Trump himself could profit by as much as $1 billion personally from his own tax plan.
“The Art of the Steal,” by Don the con.
A tax cut for the rich, however, is hardly what the nation needs right now. We are currently in the midst of another Gilded Age. Just like during the period of industrialization in the late 1800’s when corporate exploitation was rampant, our society today is again plagued with drastic income inequality. The rich are luxuriating in vast pools of wealth for themselves while everyone else is forced to toil ever greater just to eke out a meager existence.
This is not fair.
Actually, it’s worse than unfair. A tax cut for the rich would add insult to injury for the middle class because the rich have already enjoyed massive tax cuts for themselves in recent times.
Throughout our modern American history, it has always been the accepted view that as someone becomes richer and richer, they should contribute an ever greater share of their wealth to society in taxes. This makes eminent sense. The wealthy can easily afford it, and this money is much better spent on needed programs to maintain a healthy society for everyone than on lavish indulgences by a few super wealthy individuals.
This sensible approach is clearly reflected in the rate of the highest tax bracket throughout our history. Dating all the way back to the creation of the income tax in 1913, and extending all the way through contemporary times in the 1980’s, the top income tax rate for the super wealthy averaged approximately 70 percent. Yes, that’s right, 70 percent! For around seven decades straight!
And for many of these years this top tax rate was even higher. From 1944 all the way through 1963 – so for twenty years straight, including the entire decade of the great prosperity of the 1950’s, and including under the two terms of Republican President Dwight Eisenhower – the top tax rate exceeded 90 percent. Yes, 90 percent. For twenty years straight. Imagine that. And for the first two of those years, 1944-1945, the rate was its highest ever at 94 percent.
My goodness! Did the sky fall?
Not hardly. In fact, during this time the nation experienced periods of some of its greatest prosperity and enjoyed far greater equality. For all these many decades, these taxes were regarded as the fair and appropriate contribution that the wealthy were required to make in order to ensure a more free and fair society.
But then everything changed.
Along came President Ronald Reagan in 1980 who bestowed an extraordinary gift upon his super-wealthy Republican friends by granting them a shockingly huge tax cut. Reagan slashed the tax rate for the wealthy all the way down to 28 percent. Yes, that’s right. Reagan took the top rate from 70 percent, down to 28 percent.
That is an enormous tax cut. It is a decrease of 60 percent! Wow! And the super rich have largely enjoyed this bonanza to this day as this low rate has not moved very much since Reagan. Today this top rate stands at 39.6 percent, which is only around half of where the rate had been throughout the entire history of income taxes before Reagan. So the super rich have been enjoying this fifty percent tax break for some thirty years now.
This invites a bit of reflection. Let’s compare the two landmark eras from our modern history that epitomize the two opposite tax approaches and see how each affected our society. The first period was under President Franklin D. Roosevelt beginning in the 1930’s with record high taxes on the wealthy. And the second period was under Reagan in the 1980’s with record low taxes on the wealthy.
During Roosevelt, the proceeds from the taxes on the wealthy were reinvested back into society. Roosevelt used public investment to create some of the nation’s leading programs that lifted the country out of the Great Depression and provided a social safety net for those in need, while also creating robust regulatory agencies to rein in corporate exploitation. Many of these programs remain in place to this day, including the Social Security system, food stamps, the minimum wage, the G.I. Bill to assist veterans, protections for labor unions, the Federal Deposit Insurance Corporation (FDIC), the Securities and Exchange Commission (SEC), the Federal Housing Administration (FHA), and many more.
Roosevelt’s enormous public investment led to a period of tremendous prosperity throughout the nation that lasted for decades. This gave rise to the great American middle class, and improved economic equality in society.
Reagan, on the other hand, employed the exact opposite approach from Roosevelt. Reagan slashed taxes for the wealthy, cut programs for the social safety net, reduced public investment in society, and eliminated regulations to turn corporations loose. Instead of reinvesting public funds from the treasury back into society, Reagan effectively transferred these public funds directly into the pockets of the wealthy through tax cuts.
Reagan accompanied his program with a public relations campaign that sought to turn popular sentiment against government, especially so-called “Big Government.” He portrayed government as the problem not the solution, and often said that his objective was to “get government off your backs.” This is exactly the opposite approach by Roosevelt of utilizing government to help people and improve society. In fact, it is quite amazing that a politician as prominent as Reagan could get away with portraying our beloved and cherished democracy as being the problem in our society. But this stigma against our very own government perpetuated by Reagan took hold and even persists to this day.
Reagan’s policies have not fared well under the test of time. As it turns out, Reagan kicked-off an era of decline that has led to the deplorable economic inequality that plagues us today. The rich have become obscenely richer, while the middle and lower classes have suffered wage stagnation, poverty, and hardship.
The comparison is quite stark of how the massive public investment of the Roosevelt years resulted in decades of prosperity for the entire nation, whereas the gutting of public investment of the Reagan years resulted in decades of decline and drastic economic inequality.
Today, Trump’s solution to our current affliction of economic inequality is to replicate the Reagan model by cutting taxes even further for the rich and slashing public investment in our society.
This, of course, is exactly the wrong response. Instead, we need to employ the model that has actually worked in the past. And let’s face it, this is also simple common sense: The greater the investment in society, the greater the society.
So it is now high time to increase taxes on the wealthy and reinvest the proceeds back into our society for the benefit of everyone.