Saturday, April 4, 2009

Taxes: Our Friend. Republicans: Not.

Taxes, the perpetual Republican Boogey Man, supposedly hurt development and growth, or so their story goes. Yet, the post WWII period (primarily financed by government investment in employment and infrastructure - beginning in the mid 1930s and accelerating prior to WWII) until the early 1970s saw the highest growth rates the U.S has experienced. The paradoxical, as far as the "taxes hurt us" cabal is concerned, element to this is that during this period the U.S. also had it's highest marginal tax rates -- from around 63 percent in 1936 to 91 percent in 1963.

We've lived off the infrastructure built during this period, lessening inequality and creating a middle-class. But also, sadly, wringing every last bit of profit we could from it without making the necessary investments and improvements to maintain our standard of living. We spent less on our collective goods and services and allowed more and more of our profits to go to the bosses and the CEOs. Workers were producing more (and paying more in taxes) yet receiving less in services, and garnering less of the fruits of their productivity. All while watching the infrastructure - that made us so productive - crumble.

Beginning in the late 1970s and seeing it's full fruition with Ronald Reagan, a new individualist era of low taxes and uber free markets emerged. Since this, CEO pay is now roughly 400 times the average workers wage - in the 1970s it was only 40 times as much. Wages for the majority of workers have stagnated since then. Inequality has been steadily increasing. And, life, in general, has become much more volatile for the majority of wage-earners.

History seems to show us that taxes are good for everyone. With taxes at their highest, the economy was booming it's most. Business as well as workers benefited during this robust time.

The argument Republicans are trying to frame today - they would like us to believe it's about government spending badly, taxes being too high and hurting growth, and taxes generally inducing all-around inefficiencies - is really about who gains from productivity and what proportion. They want to make sure the "smart" guys, the Haves, concocting the lazy, usurious, corrupt money-making schemes (not the peon workers producing real things for the real economy) are the ones seeing all the gains and living a luxurious life-style.

The Republican platform represents and benefits the interests of roughly the highest earning 1 or 2 percent of the population. Their wish to kill the estate tax (which effects less than 1.2 percent of the population). Their obsession with continually lowering the capital gains tax (which effects only the top 5-10 percent of the populaton, the majority declaring capital gains). Issue after issue that they choose to fight over only matters to the most well-off among us.

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