Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

02 December 2010

Tax Cuts for the Rich and DADT: Two Litmus Tests

Normally, I hate litmus tests. Life is complex, and litmus tests are simple. They remind me of people who put plastic yellow ribbons on their refrigerators and cars and then insist on tax cuts that deprive our troops of proper medical care when they come home.

But these are not normal times. Our political dialogue has so far departed from common sense—let alone intelligent debate—that bold lies pass for conventional wisdom and obvious necessities for heresy.

To restore our faith in ourselves and our sanity, our nation desperately needs two things in particular. One is substantive and economic, the other is more symbolic.

The substantive issue is ending tax cuts for the rich. When I was born in 1945, the top marginal tax rate was 94%, on all income over $200,000. At that time, the President of the United States made $100,000 per year. I guess the thinking was that, if you made twice or more what the president did, most of the excess should go to the common good.

Not coincidentally, then and now were the only times in our history when federal debt had risen within striking distance of 100% of GDP. The causes of the huge debt were different then and now. Then we had fought history’s greatest war and helped defeat the two most powerful and barbaric totalitarian states ever. Now we just spent a pile to avoid a second Great Depression.

But both debts were necessary and for the common good. Paying them off was and is also. And who should pay most, now as then, but those who stood the most to gain? The postwar logic still holds true.

There is no excuse whatsoever for continuing Dubya’s improvident and inequitable tax cuts for the rich. None.

“Job creation” is a bald lie. Thirty years of Reaganomics have proved beyond doubt that “trickle down” is a fantasy. And even if it still held some bare hypoethetical, theoretical plausibility, today’s facts refute it soundly.

Our business corporations are sitting on a collective cash hoard of $1.84 trillion. They aren’t spending it on anything, let alone creating new jobs. The notion that we can create jobs by giving the individuals who run them (not even the corporations themselves) more money through tax cuts is nonsense. And the rich are not about to spend their tax windfall to stimulate the economy; they can’t even spend what they have now. The only dependable result of continuing tax cuts for the rich will be to make them richer.

And so I come reluctantly to my litmus test. I urge and expect the President to pull out all the stops to keep the tax cuts from continuing. If he can’t influence the legislative process, I expect him to use his veto.

I don’t much care whether the middle-class tax cuts expire, too. They don’t amount to a hill of beans for each individual taxpayer. And collectively they represent far less “stimulus” than the tax cuts for the rich, which themselves were less than the 2009 stimulus that was too small.

Anyhow, now is a good time to remind us that we’re all in this together. I’m happy to let go my tax windfall as long as the rich do theirs. Like Warren Buffet, who’s much, much richer, I’m willing to pay my fair share.

I won’t make idle threats. I know in both my heart and head that the President is the best of all realistic alternatives for national leadership, now or on the horizon. That includes 2012. It also includes Hillary Clinton. In my view she’s done nothing to distinguish herself as Secretary of State and absolutely nothing to change my longstanding and firm conviction that she is unqualified for higher office. (See, e.g., 1, 2, 3, and 4).

But if the President doesn’t do all he can to end tax cuts for the rich, my enthusiasm for his leadership will take a big hit. The GOP’s multigenerational assault on progressive taxation is, in my view, the single most egregious economic mistake of the last century. Its consequences are key factors in most of the other mistakes. For example, if the rich had to pay heavily (and currently!) for foreign wars, they would be less likely to support them or begin them, even if our “voluntary” services now make their families immune.

So if the President does not use all his power to end the tax cuts for the rich, with or without those for the middle class, I will lose faith. I will come to see him not as a transformational figure, but as just another bought politician, albeit smarter and better than most.

My second litmus test is more symbolic. Unlike the steady drop of our max tax rate from 94% to 35%, where it’s been from 2003 on, “don’t ask, don’t tell” is not a significant factor in our national decline.

But it’s important for two reasons. First, equality for homosexuals is just the last in a long series of painful but necessary tests of Thomas Jefferson’s credo: “all men are created equal.”

How can our President not see that point with clarity and passion? He sits in the White House because, two generations ago, Dr. King died, and Lyndon Johnson put everything on the line, for long-overdue equal treatment of African-Americans. What about the next victims of discrimination and scapegoating?

Where is the man who, in the midst of one of the longest, bitterest presidential campaigns in our history, spoke to us like adults in Philadelphia, on the subject of race? Can that same man not speak up forcefully, and act forcefully, for the principle that made him president and defines us as a nation? The President should be leading the charge on this issue, not hiding in the trenches hoping it will go away.

I get the respect for due process, for the military as an institution, and for the brass. Above all, I get the deference and loyalty due Bob Gates, who by all accounts has been a superb Secretary of Defense, adding immeasurably to the President’s administration. But Gates has delivered the “cover memo” and lined up all the military ducks.

It’s time now to move and to lead, with the passion required for an issue of equality. There’s still at least one more group waiting in the wings for relief: America’s scapegoated Muslims. They may be the toughest nut to crack because of the fear mongering and the vile lie—winked at by Boehner, McConnell et al.—that the President himself is one of them.

Even cynical politics suggests the President should move now. The many people who hate him just for who he is are not suddenly going to fall in love with him for keeping DADT. He has everything to gain, and little to lose, by leading on this issue, as on fair taxation.

I know, I know. Dubya’s father, the effete George Herbert Walker Bush, said “Read my lips: no new taxes.” Circumstances changed, he raised taxes, and he ended up a one-term president. Since then, every politician has made risk aversion an understatement. Maybe that’s why Hillary became such a feckless triangulator, and why every politician since has had a rubber spine.

I didn’t vote for the elder Bush, and I didn’t much like him as president. But he grows on you. He did he right thing in raising taxes, despite his earlier campaign promise, and he paid the price. On Colin Powell’s advice, he also held back the dogs of war. After an overwhelming military victory in Gulf I, he stayed out of Baghdad and avoided the quagmire that his son jumped into so eagerly on false information. The elder Bush is looking better and better as time goes on, and it’s only been 18 years since his term ended.

Barack Obama once said he would also settle for a one-term presidency if that’s what it took to do the right thing. He now can do two right things, all by himself. He can stop the tax cuts from enduring with his veto. He can wipe out counterproductive discrimination in our military—which soils Jefferson’s and Dr. King’s very memories—with a stroke of his pen. Or he can simply withdraw the government’s appeal of the district court’s order and let the judiciary do its job.

If he does both right things, he can be sure of one thing in a very uncertain world. He will stand at least as high in his country’s and history’s esteem as his predecessor’s father, who these days doesn’t look too bad.

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