Political Animal

Blog

July 13, 2012 3:05 PM You Want To See “Big Government?” Go Back to 1971!

By Ed Kilgore

Kevin Drum notes today that all the overheated Republican rhetoric about the president’s tax proposal, suggesting capitalism is on the very edge of disappearing, is a bout of hysteria over a relatively small amount of money for the wealthy:

I just want everyone to be absolutely clear on what this “narrative of aggrievement” is all about. It’s about Obama’s proposal that the marginal tax rate on income over $400,000 should rise from 35% to 39.6%.
That’s your aggrievement. That’s your entitlement. That’s your socialism. That’s your class warfare. An increase in the top marginal tax rate of 4.6 percentage points.
Four. Point. Six.
This is what America’s most prosperous citizens are up in arms about. This is why Barack Obama is an enemy of capitalism. These are the spiteful shackles he proposes to use to subjugate America’s engines of job creation. It’s the reason America’s wealthiest citizens are so frightened about the future of their country.
4.6 percentage points. Just let that sink in.

Add in the fact that Obama is simply trying to restore the top tax rate under which the most rapid accumulation of private wealth in human history—in the late 1990s—occurred, and the insanity of the “socialism” talk becomes especially apparent.

Look, folks, I’m not that old, and I can remember the time a Republican president unilaterally created a policy that was vastly more disruptive of the private-sector economy than anything Barack Obama has even dreamed of: Richard Nixon’s imposition of wage and price controls in 1971. Top tax rates were much higher then, too. Somehow or other, liberty survived.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

Comments

  • howard on July 13, 2012 3:10 PM:

    the amusing thing is that these were the precise same fulminations we heard from the right when clinton passed his tax hike in 1993, led, of course, by the wsj, who insisted that a recession must ensue from such a crushing increased tax burden.

  • Josef K on July 13, 2012 3:22 PM:

    Madness. Utter, sheer madness.

    And I'm not talking about just the fulminations and caterwauling on the right end of the dial. I'm talking about the nearly infintismal size of the proposed increase; unless spun correctly, I can't see where this would be a major draw for Democratic and undecided voters. Just sayin'.

  • walt on July 13, 2012 3:32 PM:

    Do the "job creators" really care that much? I suspect it's more likely that their willing stooges in the GOP base care much more, and only because they're catechized by their Pavlovian overlords at Fox News and talk radio.

    Republicans will live or die by this celebration of feckless greed. Obviously, they've done their focus groups and they know what dials well and what doesn't. Facts alone won't change the debate. But if you're struggling to pay your bills and the only reason you have to vote for plutocrats is that they hate gays and Mexicans like you do, well, that's going to be a tough lesson in values clarification.

  • ckelly on July 13, 2012 3:36 PM:

    This is where our political discourse has taken us. Anything remotely approaching rational, sound, dare I say FAIR, policy is thrown shrieking and screeching into the trash heap. Republicans throw a lock-step tantrum and Dems fail to make their case and surrender. Anything short of complete surrender to the corporate world and the ultra rich is unacceptable - meanwhile the canyon between rich and poor widens, more US move into poverty while a tiny plutocracy controls wealth and power. Sad.

  • Hedda Peraz on July 13, 2012 3:38 PM:

    HEY! I am Taxed Enough Already, as in TEA. Even though I am retired, on Social Security and Medicare, I am probably still taxed too much by Obama's Big (socialist) Government. Besides, I bought this tricorner hat, and I intend to wear it. Where's the party?

  • majun on July 13, 2012 3:49 PM:

    Yes, but as any right thinking Republican will tell you, whether you ask or not, Richard Nixon was a Communist in a plain Republican cloth coat.

  • c u n d gulag on July 13, 2012 4:11 PM:

    Outside of the fact that 90% of our MSM is owned by a handful-and-a-half of corporations, I don't see why this isn't plain to the average American voter?
    It's not a 14% increase. That, I wouldn't find at all objectionable, but I could see why those who it affected, might.

    It's something EVERY FECKIN' working slob in this country has had to face on a local and/or state level!
    Multiple times, since the Federal Government ceded a lot of things back to the states, districts, and towns.

    EVERY FECKIN' ONE OF THEM WORKIN' SLOB!!!

    And yet, the marks, rubes, dopes, fools, simpletons, and suckers, among those in the economic groups LEAST affected, have been grifted into rallying 'round the flag, boys!' for the richest and most powerful.

    Here, Mr. Franklin.
    It worked for awhile.
    But in the end, we couldn't keep it.
    Too many greedy grifters, and too may fools.

  • Daniel Kim on July 13, 2012 4:22 PM:

    I forgot all about Nixon's "phases". It makes me all nostalgic to remember them (I was just a kid then).

  • paul on July 13, 2012 5:02 PM:

    Remember that wage and price controls controlled wages. You know, those things that workers might otherwise negotiate to get increased.

  • Mimikatz on July 13, 2012 5:56 PM:

    This isn't entirely correct. The second Bush tax cuts lowered the capital gains tax from 20% to 15% and for the first time introduced a preferential 15% tax rate on dividend income from US corporations. For someone in the top bracket with substantial dividend income it is actually a jump from 15% to 39.5%, which is 24.5%, a substantial amount. Then there is the preferential 15% rate on carried interest which hedge fund managers and Mitt Romney use to save 24.5% on other income. In fairness, this is pretty substantial, though of all the people in the country, these can certainly afford to pay more taxes and don't deserve any sympathy whatsoever. But this is why it hurts.

  • schtick on July 13, 2012 7:17 PM:

    If there were any journalists left in America, they would state what the people at 36% or 39% actually pay in taxes and not their tax rate. How many of the middle class get loopholes so they pay little to nothing like Willard and the rest of those "poor" rich people?

  • Taobhan on July 13, 2012 10:08 PM:

    The thing to remember about Nixon and the Republicans in 1971 is that they NOT the same as Republicans now. If today's Republicans time-traveled back to the 1970s, they would be considered the extreme right-wing of the John Birch society. That's how far right the conservatives have been able to swing the nation in 40 years. Today's Republicans would be calling Richard Nixon a left-wing socialist if he was governing now. Maybe that explains, at least partially, why government has such a hard time governing today.

  • Anonymous on July 14, 2012 1:44 AM:

    I actually heard some Repub talking head say that maybe those affected by the tax hike would be OK with it IF they got to choose where the extra taxes went. They think they're special I guess. Well, how about this: only if I get to choose where my taxes go, and it wouldn't be to subsidizing oil companies or to war profiteers!

  • DisgustedWithItAll on July 14, 2012 12:46 PM:

    You'd think they'd be more irritated about the Mao suits they're going to have to wear.