The “war on the rich”

I was watching a very entertaining Bill Maher last night and some ridiculous CNBC poppet was talking about Obama "soaking the rich."  It really is a ridiculous meme being pushed by the plutocrats and their apologists.  Daniel Gross has a terrific deconstruction of what is actually happeneing in Slate:

To hear conservatives tell it, you'd think mobs of shiftless welfare
moms were marauding through the streets of Greenwich and Palm Springs,
lynching bankers and hedge-fund managers, stringing up shopkeepers, and
herding lawyers into internment camps. President Obama and his
budgeteers, they say, have declared war on the rich…

It's hard to overstate how absurd these claims are. First, let's talk
about the "massive increase in progressivity" that Gerson deplores. It
consists largely (but not exclusively) of returning marginal tax rates
to their levels of 2001, before Gerson and the epically incompetent
Bush administration of which he was a part got their hands on the reins
of power. Obama wants to let marginal rates for families with taxable
income (not total income, but taxable income) of more than $250,000
revert from 33 percent to 36 percent, and to let the top rate—currently
35 percent on family income above $357,000—revert to 39 percent. (Here
are the current tax tables.) There's also talk of capping—not eliminating, but capping—deductions on charitable giving and mortgage interest.

Obama's proposals don't mean the government would steal every penny
you make above the $250,000 threshold, or that making more than
$250,000 would somehow subject all of your income to higher taxes.
Rather, you'd pay 36 cents to the government in income taxes on every
dollar over the threshold, rather than 33 cents.

Second, this
return to 2001's tax rates was actually part of the Bush tax plan. The
Republicans who controlled the White House and the Republicans who
controlled the Congress earlier this decade decreed that all the tax
cuts they passed would sunset in 2010. They put in this sunset
provision to hide the long-term fiscal costs of the cuts…

Fourth, we also know from recent experience that lower marginal rates
on income taxes, and lower rates on capital gains and dividends, aren't
necessarily wealth producers. The Bush years, which had lower marginal
rates and capital gains taxes, were a fiasco. In fact, if you tally up
the vast destruction of wealth in the late Bush years—caused by foolish
hedge funds, investment banks, and other financial services companies,
it seems like the wealthy have in fact been waging war on one another.

The whole thing is great.  Read it.  And on the Bill Maher note, he had a great defense of government last night in his "New Rules."



About Steve Greene
Professor of Political Science at NC State

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