Have the Rich Always Laughed Stiff Tax Rates Away?

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

The guardians of our conventional wisdom on taxing the rich have messed up — and they know it. They slacked off. They started believing their own tripe. Average Americans, they assumed, would never ever smile on proposals to raise tax rates on the richest among us. After all, the conventional wisdom maintains, those average folks figure that someday they’ll be rich, too.

But now, with tax-the-rich proposals proliferating and polling spectacularly well, the keepers of our bless-the-rich faith are panicking. Their old rhetorical zingers no longer zing.

Higher taxes on the rich as a “penalty on success”? Average Americans today don’t see “success” when they gaze up at America’s top 0.1 percent and see a 343 percent increase in earnings, after inflation, over the past four decades. They see monopoly and outsourcing and insider trading.

Some fans of grand fortune see an opportunity amid this cynicism. They’re realizing that riffing off this cynicism may be the only way to keep taxes on rich people low. Raising tax rates on the wealthy may seem reasonable, their argument goes, but high tax rates on the rich can never actually work out as intended. The rich and their paid help — their accountants and lobbyists — can always end run them.

So disregard those high tax rates on the rich in effect back in the middle of the 20th century, the argument continues. Those top rates — 91 percent in the 1950s and into the 1960s, then 70 percent through the 1970s — never made much of a difference on how much the wealthy had in their wallets.

“The overall trend is unmistakable,” pronounced John Carlson, the cofounder of the right-wing Washington Policy Center, earlier this month. “When rates were much higher, the wealthy sheltered their money and paid a smaller share of the nation’s tax bill.”

In other words, seriously taxing the rich will always be impossible. So why bother even trying?

Sam Pizzigati edits Too Much, the online weekly on excess and inequality. He is an associate fellow at the Institute for Policy Studies in Washington, D.C. Last year, he played an active role on the team that generated The Nation magazine special issue on extreme inequality. That issue recently won the 2009 Hillman Prize for magazine journalism. Pizzigati’s latest book, Greed and Good: Understanding and Overcoming the Inequality that Limits Our Lives (Apex Press, 2004), won an “outstanding title” of the year ranking from the American Library Association’s Choice book review journal.

Posted In: Allied Approaches

Union Matters

He Gets the Bucks, We Get All the Deadly Bangs

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

National Rifle Association chief Wayne LaPierre has had better weeks. First came the horrific early August slaughters in California, Texas, and Ohio that left dozens dead, murders that elevated public pressure on the NRA’s hardline against even the mildest of moves against gun violence. Then came revelations that LaPierre — whose labors on behalf of the nonprofit NRA have made him a millionaire many times over — last year planned to have his gun lobby group bankroll a 10,000-square-foot luxury manse near Dallas for his personal use. In response, LaPierre had his flacks charge that the NRA’s former ad agency had done the scheming to buy the mansion. The ad agency called that assertion “patently false” and related that LaPierre had sought the agency’s involvement in the scheme, a request the agency rejected. The mansion scandal, notes the Washington Post, comes as the NRA is already “contending with the fallout from allegations of lavish spending by top executives.”

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Corruption Coordinates

Corruption Coordinates