President Obama gave an excellent speech yesterday, framing the debate about debt and revenue and the choices we face as Americans. I was particularly happy that he talked about raising taxes on the wealthiest, even if that only means a very tepid expiry of the Bush tax cuts. This will take the country back to the top rates under Clinton, which are still incredibly low by historic standards. The Republicans are always screaming about a “Golden Era” in our country’s past, one in which the American dream was a reality and productivity and the economy was booming. They usually are referring to the decade of the 1950s(*), so I thought it would be instructive to pick 1955 as an example and look at what the marginal tax rates were back then:
As we can plainly see, the top tax rate was an astounding 91%, and there were many, many brackets in-between the lowest and the highest. This is called progressivity, and it insured a number of things such as a more equal society, a larger middle class, and most importantly funding for projects affecting the common good. Compare this 91% to the top rate under Clinton of 38.6% and you realize how galling it is that Republicans scream this is too high. Since 1932 (the year of the New Deal and the beginning of the “social compact” that Obama so eloquently mentioned in his speech yesterday), the top tax rate has only been lower than today’s 35% in four total years. And this 35% is bankrupting our country’s ability to get anything done.
The Republicans are always screaming their mantra that taxes are too high, and it plays well with people until you get into specifics about what services will be cut. But what the right wing really wants, even if they won’t say it, is to dismantle the social compact and the last vestiges of the New Deal entirely. Knowing they can’t say this directly, they have rather successfully opted to defund government until we are bankrupt and have no choice but to go back to the days of incredible income disparity and people dying on the street if they were poor. They have no concept of the common good and fail to see how investment in the public sphere, from healthcare, to roads, to research, to education, to food safety benefit them individually and society as a whole. And because they fail to see this, they are willing to destroy the fabric of this country. In their own professed “Golden Era” of the 1950s, the country raised revenue for important infrastructure projects like the highway system (among other things) which was an incredible economic boost to the entire country. We have no money these days for big thinking and infrastructure and social well being, we are devolving into the worst kind of dog-eat-dog world. This is not the vision we should accept for this country. Obama laid out some things very clearly in his speech yesterday, and framed the debate in a refreshing way. Let us hope that our lawmakers are up to the challenge of a progressive America.