We have heard from some quarters on the Right about how social programs and things like a mandatory minimum wage rob people of their incentive and deny them the supposed dignity of work. Well, as one who started about at $3.65 an hour (1975 – which would be $15.93 today, or a little over $33,000 a year) standing in front of a drop hammer on the second shift, my view is there ain’t all that much dignity involved in a lot of work done in this country. But more to the point, this rhetorical appeal to the gawl-dang-swagger-and-spit-don’t-take-nothin’-from-nobody individualism masks policy choices (don’t forget, most Members of the two Houses of Congress are millionaires) that are actually aimed at protecting wealth, particularly in the form of taxing high incomes at lower rates. Paul Krugman blogs today:
Favoring Wealth Over Work
In my last post I tried to document the extent to which modern Republican rhetoric has already adopted the values of “patrimonial capitalism”, even though America’s top one percent still owes its high incomes largely to compensation rather than wealth. On reflection, I thought I should also document the extent to which the GOP has put its money — or, actually, taxpayers’ money — where its mouth is, with concrete policies that favor wealth over work.
Consider, as Exhibit A, the Bush tax cuts. Bush did cut the top tax rate on earned income from 39.6 to 35 percent, a 12 percent reduction. But he cut the rate on capital gains from 21 to 15, a 28 percent reduction; he cut the rate on dividends from 39.6 (because dividends were previously taxed as ordinary income) to 15, a reduction of more than 60 percent. And he put the estate tax on a path toward zero — a 100 percent reduction.
The estate tax made a partial comeback thanks to the awkward fact that a Democrat was in the White House, and there have been some tax hikes on capital income. The point, however, was that Bush tried to give people living off wealth, inherited wealth in particular, much bigger tax cuts than he gave high earners.
And the efforts go on. I know that Paul Ryan likes to lecture the poor about the dignity of work; but his famous initial “roadmap” called for the complete elimination of taxes on interest, capital gains, and dividends, plus elimination of the estate tax. In other words, he proposed eliminating all taxes on income derived from wealth.
Now, Ryan casts this as policy that favors saving. But the truth is that it would mainly favor people born on third base or beyond. Even now, 6 of the 10 wealthiest Americans are heirs rather than self-made entrepreneurs — the Koch brothers plus a bunch of Waltons. There’s every reason to believe that the role of inheritance will only grow over time. And if it does, half our political system will be cheering it on and offering the ever-more-empowered heirs as much assistance as possible.
Probably more than half, Dr. Krugman. Include all those Third Way-ers. And, remember, a lot of Dems, doubtless afraid of being attacked for refusing to cut taxes during their re-election campaigns, voted for those cuts.