The Tax Bomb
The drumbeat started sometime last week. The Press declared it would be the next big legislative battle. A number of conservative pundits were deployed to sound the alarm: unless Congress acts this Fall, Bush's tax cuts will expire by the end of the year --- amounting to "the biggest tax increase in decades." They called it the ticking tax bomb. This week, Stephen Colbert elevated the debate with a brilliant send-up of the 'tax bomb' hysteria ('Quick rich people! To your tax shelters!').
[BTW: Colbert's satire offers the clearest, most accurate, if also the crudest illustration of the 'trickle down theory' that I've ever seen].
I want to believe that most people have little or no sympathy for the the wealthiest 3 percent who have benefitted most from the Bush tax cuts. Especially after we've seen how so many of them increased their earnings through short-sighted schemes that harmed our economy. And 'trickle-down?' Forget it. We all know that's a lie, right? Especially now that we've seen how the super-rich no longer reinvest their savings in things that matter, like productive capacities and job creation. Can anyone seriously look at the past 7 years and say those tax cuts for the wealthy gave our economy a boost?
But then I remembered a news item I saw last week while traveling in Maine. It warned of the big tax hit the wealthy may face, if the Bush cuts expire, and included a handy graphic 'showing' how the overall tax burden unfairly sits on the shoulders of the wealthy (I have dozens of charts and graphs showing just the opposite). All done with a straight face. And then I realized how hard it is to shake the bedrock belief that tax cuts for the rich are good for everyone, therefore, raising taxes during a recession (when we need the rich to invest) must be a terrible idea. For the past 35 years, our economic policy has been shaped by the assumption that lower taxes lead to more savings, and savings are where vital economic investments come from. Taxes on savings (for the rich) have been frowned upon. We have not raised marginal tax rates in decades. We have steadily shrunk taxes on capital gains, and are on the verge of eliminating inheritance taxes. None of this helps middle- or lower-income taxpayers. In fact, lower taxes for the wealthy have correlated with negative economic trends for the rest of us: stagnant wages, more overtime, higher healthcare costs, more of the burden for under-funded services and, more recently, job losses and high foreclosure rates. Could it be that the short-term ecoomic interests of the top 3 percent don't align with the public interest as well as we were led to beleive?
This is another example where, alas, the facts don't seem to matter. Good framing is what matters, especially when your frames tap deep-seated fears of high taxes and big government. Can these fears trump our mistrust of the super-wealthy? Republicans (and a few conservative Democrats) are betting that the phrase "the biggest tax increase in decades" will make us forget how the wealthy have made off like bandits while the rest of us are dealing with the recession that we did not create.
