What's Progressive About it?

The comments on my last post about progressive taxation suggest that I should have made myself a lot clearer about what was I proposing -- and spelled out what other options there are. In brief, I suggested we return to a graduated set of tax rates that levy a higher proportion of income from those who earn more and a lesser share from those who earn less.

This is "progressive" in a very simple, mechanical way: the rates progressively get higher, according to income. This has been the basic framework of U.S. taxation of income since the Supreme Court declared such levies constitutional in 1913.

Taxes became ever more progressive and leaned ever heavier on the upper income strata from Presidents Franklin Roosevelt to Carter, then reversed under Reagan and under the second Bush -- both of whom cut the upper tax rates sizably (to benefit the wealthy), as I mentioned in my post.

There have also been "regressive" forms of taxation. The most common one is the sales tax: everybody who buys X pays a certain percentage of the price. This is regressive because it ignores the disparity in ability to pay. Rich people buying X pay a smaller proportion of their income in sales taxes, while poor people pay a higher proportion -- so even both pay the same amount of money, it hurts richer consumers less than it hurts poorer one.

In the 1996 and 2000 presidential elections, Steve Forbes proposed a modified version of the "flat tax," a levy of 17% on all personal and corporate earned income above $33,000. This is the sales tax principle applied to income.

Like sales tax, it is regressive -- otherwise you can bet your sweet patooties that Forbes, now publisher of the eponymous business magazine, would not have proposed it. This would have meant that folks paying the lowest tax rate at the time, 15%, would have experienced a tax increase, while those paying at the highest rate, then 39.6%, would have had their taxes cut by more than half!

And it would have bankrupt the government faster than you can say "George W. Bush" or "Ronald Reagan." Guess who wins there? Those who have big incomes and don't need anything from government, except the occasional war on which to make profits.

Let's Return to Progressive Taxation

People who hate taxes and hate government must hate roads and schools and libraries and police and courts, not to mention certified foods and medicines and a whole host of other hallmarks of a civilized society today. The issue is not whither taxes, but whither unfair taxes.

From the 1930s until the 1980s, the United States had a progressive tax system that did a mildly good job of undoing the vast shift toward income and wealth inequality of the late 19th century through the 1920s. Under that great red revolutionary, Dwight David Eisenhower, the top marginal tax rate was 92%.

So why does the political marketplace of ideas accept as dogma that anything worse than Reagan and Bush rates of 28% and 35% are sacrosanct? Why should there be just three rates topping at little more than a third, when the revenue they produce simply fails to pay for a good health care and retirement system for all (not to mention the odd war our country must somehow always be fighting)?

Given that 20% of the people own 80% of the nation's assets, shouldn't they who are more able, contribute substantially more to a society that has made their riches possible?

These are rhetorical questions. President Obama (how nice that still sounds ...!) is being overly timid in suggesting that rates merely return to President Clinton's 39.6%. That's not how a changed America will come about.

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(By popular acclaim, I am returning to my clarifications concerning the revolutionary agenda I proposed, which I admit was never my wholly original idea. In the next few posts I shall be attempting to review the points in greater detail.)

The Tabloidization of Michelle Obama

Just as Condoleezza Rice made a splash in Europe with her boots, MIchelle Obama is making a news with bare arms and -- gasp! the salts! -- hugging a queen. Obviously, Rice had fun amid her prevarications about Iraq and Obama decided to play with the hand she was dealt.

Does anyone remember what Rice, no dummy by any standard, had substantively to say and how she fell short of her oath of office? Has anyone remembered that Obama -- who did not run and was not elected -- is a lawyer with training and experience every bit as rigorous as her husband?

Why are people discussing Obama's looks and manners when the world is beyond the brink of disaster?

Perhaps it is that the powers that be, who own the "news" media, don't want anyone to be thinking, lest they realize how badly they have been shafted. Perhaps we are all too lazy or lobotomized to rub those two brain cells we've got left.

The G-20 meeting was important but essentially secret. Why was there no questioning of how come those democratically elected heads of governments were keeping secrets from their electorates?

We, the public, owe it to ourselves not to feed on lazy, tabloid journalism.