I was reading Paul Krugman's blog this morning (lots of good stuff there on inequality, like Money and Class and The Realities of Class Begin To Sink In), but this one caught my eye
(Obama and the One Percent) and I decided to write a short post about it.
He starts by talking about the idiot who compared criticism of rich folks to the Kristallnacht. But he then moves on to a very important point that sometimes is overlooked:
Anyway, thinking about this sort of thing makes me realize that there’s a danger, especially for progressives, of confusing the proposition that Obama’s billionaire haters are stark raving mad — which is true — with the proposition that Obama has done nothing that hurts the plutocrats’ interests, which is false. Actually, Obama has been tougher on the one percent than most progressives give him credit for.Paul Krugman: Obama and the One Percent
Start with taxes. The Bush tax cuts haven’t gone completely away, but at the very high end they have been pretty much reversed; plus there are additional high-end taxes associated with Obamacare. The result is that taxes on wealthy Americans have basically been rolled back to pre-Reagan levels.
So the one percent does have reason to be upset. No, Obama isn’t Hitler; but he is turning out to be a little bit of FDR, after all.
Mr, Krugman has a cool graph that I do not know how to copy showing that effective taxes on the one percent now are about what they were in 1979 (one percent higher now). You can see the Reagan cuts, the Clinton increases, the Bush cuts, and the Obama increases. The effective rate of federal taxes on the 1% was about 35% in 1979 and is about 36% now. That is what our political battles have been about the last 35 years. That rate at which the very wealthy pay taxes.
Mr. Krugman links to a story in the Atlantic from January 2013. Here is a little from the Atlantic article:
In fact, it looks like the top 1 percent could end up paying more overall in federal taxes next year than at any time since at least 1979, as shown on the graph below. The country's richest households will be paying a bit more than 36 percent of their income to Washington -- higher than the most recent peak of 35.3 percent in 1995, or 35.1 percent in 1979.The Atlantic: In 2013, the Top 1% Will Pay Their Highest Total Tax Rate Since 1979
This chart* shows the federal effective tax rate, which is Washington's actual cut of your income. Effective rates matter more than marginal rates. In 1979, for instance, the top marginal tax rate was 70 percent, but it affected very little income, so the average total tax rate for the 1 percent was about half that figure.
The graph is there also and it shows about 35% in 1979 and about 36% in 2014. I think it should be higher than 36%, but before we can get there, the Republican tax cutting from the last 35 years had to be overcome. The battles need to turn to increasing that effective rate, and it may take much organizing and work to do so. It took 35 years to overcome the reaction of the 1980s, and we're not completely there yet. It would be nice if right made might, but the reality of our world is that any concession from capital must be earned by sweat and organizing, by struggle.
I wish there was a lot of FDR in President Obama and Democrats in Congress, but a little bit of FDR matters. When good things happen, progressives should applaud them, while fighting for even more progressive outcomes. This is not enough, but glad we got here. Now we need more.
One can applaud this, the impact of Obamacare, and the raise of the minimum wage for federal contract workers, and still organize against the TPP and prepare to fight the President and some Democrats on that issue if necessary.
It's a long struggle. We are just beginning to overturn the world-wide rightward trend exemplified by Reagan and Thatcher. There is much more work to do. I don't think the struggle will ever end, but an outgrowth of the struggle is that more peoples' lives can improve. To me, that matters. So I do not give up.