One of the most successful memes to come out of the Reagan-Bush era is that tax cuts are good. The GOP has even managed to sell tax cuts for the wealthy by making the hilarious claim that if 100 million people get $500, then it's fair for 10 million people to get $4,000 and 1 million people to get $30,000.
After all, that's $50 billion for the working and middle class, $40 billion for the rich, and only $30 billion for the uber wealthy!
Now, I understand why the GOP advocates this. They have been relentlessly pushing policies that concentrate wealth and power.
What I wonder is why so many Democrats go along. Ten or fifteen years ago, were you sitting around going golly gee, taxes are too high? Instead of investing in the public commons, we need tax breaks? And we should skew those tax breaks to benefit the wealthy more than others?
The President has made very good remarks regarding not creating new Bush tax cuts for the rich. But there seems to be some concern or frustration that Pelosi and Reid haven't put the 'middle class' tax cuts up for a vote.
The question I keep asking myself is, who cares? If you made a list of your top five or ten top priorities, would lowering taxes be among them? The one and only saving grace of Bush tax policy is that they legislated a return to the Clinton-era tax policy on Jan 1, 2011. Were the Clinton years really so awful from a tax perspective?
Talking about tax cuts feeds into the GOP narrative that government is not good at allocating resources in our society. It also feeds into the GOP narrative of hiding the extent of wealth inequality in our society.
There's a new study outfrom some people at Harvard and Duke that helps hit home the success of this rhetorical framework in confusing people about how much wealth inequality exists in America [pdf warning].
As the authors, Michael Norton and Dan Ariely, describe in the abstract
Disagreements about the optimal level of wealth inequality underlie policy debates
ranging from taxation to welfare.
This manipulation is at the heart of the GOP's PR strategy. Confuse people about what reality looks like and you skew the policy discussions that build upon those understandings.
When you conduct surveys outside of the PR soundbites, you find something pretty straightforward, but far outside the Establishment Consensus in Washington
Despite these (somewhat predictable) differences, what is most striking about Figure 3 is its demonstration of much more consensus than disagreement among these different demographic groups. All groups – even the wealthiest respondents – desired a more equal distribution of wealth than what they estimated the current United States level to be, while all groups also desired some inequality – even the poorest respondents. In addition, all groups agreed that such redistribution should take the form of moving wealth from the top quintile to the bottom three quintiles. In short, while Americans tend to be relatively more favorable toward economic inequality than members of other countries (Osberg & Smeeding, 2006), Americans’ consensus about the ideal distribution of wealth within the United States appears to dwarf their disagreements across gender, political orientation, and income.
Americans aren't opposed to revenue and expense policies that are designed to give every American a fair shake of the American dream. Americans are just confused by the political rhetoric about how unequal our society is and, for tax policy in particular, how much tax cuts and tax breaks and tax loopholes and tax rebates and so forth benefit the wealthy far more than the rest of us.
Crossposted at The Seminal at FDL.