Saturday, October 16, 2010
This is supposedly a banner year for the angry voter. For over a year now, we have all heard and read stories about highly-compensated wall street executives, once supporters of Obama's 2008 presidential campaign, who are resentful of the way they have been portrayed by the Obama White House. They claim to be alienated by the financial reform legislation that made it through Congress, legislation that establishes consumer protection guarantees, provides the government with new tools for protecting taxpayers, and prevents financial firms from taking the types of risks that led to crisis housing meltdown in 2008. The truth is that the legislation was not even as strong as originally intended. Certain types of risky credit derivatives can still be traded “in-house” by the firms, instead of within newly created affiliate entities designed to deal with the riskiest types of trading.
Be this as it may, we can all agree that the financial reform legislation represents the strongest consumer protections enacted in recent decades. This was incredibly necessary legislation; this country simply cannot afford another meltdown like what occurred in the mortgage industry two years ago. Although I do not side with them, I can understand why certain Wall-Street executives would be unhappy. These people want to make money, and they are paid outrageous sums to lead their firms as far into the black as possible. Any legislation that makes it more difficult to do this will be generally abhorred on Wall Street.
More recently however, anger within the highest tax brackets has been focused on the (hopefully) inevitable expiration of the Bush tax cuts. The rage among the rich has grown louder, more widespread, and harder for me to understand.
By almost any statistical measure, the income gap between the richest people in this country and the less-fortunate is increasing. Not coincidentally, this widening is correlated with the decrease in the highest marginal tax rate seen since the '70s. The classic case for tax cuts is that they benefit middle-income Americans and lead to the vaunted “trickle-down” effect. Come on. There is no way that all of the ardent condemnations of tax increases are from wealthy business-owners afraid that raising their taxes might hurt the profitability of their business. With the political structure we have, wealthy people have a disproportionate ability to effect politics through campaign contributions and smoozing with politicians, and movement conservatism provides them the robust structure necessary to make their views widespread.
Right now, there a record amount of Americans are in deep poverty. If the wealthiest Americans get their way with tax policy, what does that say about how our elections work? Hundreds of millions of dollars are spent in Washington every year by Conservative think-tanks to advance tax policies that are driven by the richest people in the country. I don't necessarily think that the highest marginal tax bracket needs to go back to where it was in the '40s and '50s, but the amount of anger and whining being spewed by conservatives about taxes is discouraging.
I agree much as the next person that the American Dream should be earned by hardworking Americans, but if the gap between the haves and have-nots keeps rising as it has been, poor Americans are going to be worse off for it. That much just seems obvious. As a Democrats and Progressive, I don't think that the wealthiest 1% of this country should get to keep the Bush tax cuts. If they do, I won't be able to shake the notion that their wealth makes them different from someone like me and especially from millions of poor Americans who don't have nearly as many opportunities as I do.