It's shameless the way apologists of our current extreme level of economic inequality attack the proponents of a more progressive tax system. Inequality is an "obsession," says Holman W. Jenkins, Jr. in today's Wall Street Journal, and Mitt Romney has accused President Obama of promoting "the bitter politics of envy." Isn't this rather like criticizing a schoolteacher for promoting "envy" if he or she supports kids who are complaining that the class bully is taking their lunch money?
The case for doubling the tax share borne by the 1% is, you would think, a rather easy one to make. The incomes of the 1% have grown so large that they no longer have any meaning in terms of consumption or even large investments. They are more like monopoly money or chips in a casino, and there are so many chips out there that the 1% doesn't know what to do with them.
Meanwhile, also in today's Wall Street Journal – in what one might call the "facts" section as opposed to "opinion" section which contains the views of Holman W. Jenkins, Jr. referred to above – there is an article headed "Wage Divide Grows Wider," which is based on a Labor Department report issued yesterday. "In the first quarter of 2012 people in the bottom tenth of the work force earned $360 a week or less, the Labor Department said." How would Mr. Romney or Mr. Jenkins feel if they found themselves in this group? Have they ever thought how hard the budget choices must be for an individual or family with an income of $360 a week? Would a demand for, say, elimination of payroll taxes and increases in social services like health care services for this group, paid for by higher taxes on the rich and upper middle classes, have to be based on envy?
Meanwhile, education and other social services that might alleviate the situation of ordinary working Americans and help them rise into higher income brackets, are being squeezed. As Treasury Secretary Timothy Geithner reminds us, by the end of the year the country will face big tax and budget decisions. A demand for fairness would surely be based not on envy but on a recognition of the desperate circumstances of many Americans in the middle and lower economic ranks.
Good points. What's funny is that Jenkins even says that "the claimed shift toward greater inequality can be made easily to disappear, especially when consumption rather than income is measured".
ReplyDeleteThis is obviously key to our point of view - that the wealth of the ultra-rich cannot be spent as consumption, or even as sound investments. On the one hand, this creates the blockage in the circular flow of income we discuss.
On the other (and perhaps we should focus more on this), it makes the "disincentive" argument ridiculous.
The new assault on the existence of an inequality crisis
ReplyDeleteDoes not deny the growing gap
In fact butthemer et al
only massage the data to reduce the size of the gap and not it's direction
They also miss the sign of the second derivative here to
The gap is widening at a re accelerating rate
Fast 80's slower 90's and missed but buttmeisters elves
faster again in the 00's
In fact the last few years of snail paced recovery
seem to suggest we amerikan amigos are intra gap widening at a record rate