When considering the alleged plight of the very rich groaning under the socialist yoke of Charlie Rangel’s tax proposals, it’s worth keeping in mind that the super-rich’s share of the overall income pie is been skyrocketing:
The reasons behind this trend are complicated. But one natural response to it would be to raise taxes on the very rich and use the tax revenue to finance public services. Under that scenario, everyone winds up better off than they were 25 years ago. Absent stepped-up taxation on the rich, changes in the structure of pre-tax income in the United States ensure that many—if not most—Americans see little actual gain from economic growth.
If you notice there, the wealthiest 10% of Americans account for roughly 50% of the country's entire income, and the wealthiest 1% account for just shy of 25% by themselves.
The point Yggy is trying to make here is that we kind of have to tax the wealthy. It's the only place we can really put new taxes, because that's really the only place where we've seen actual economic growth over the last ten years or so. That's just good fiscal policy, frankly. "A rising tide lifts all boats" but if you can't afford a boat in the first place, you just drown when the tide comes in. Yggy concludes:
This is worth noting because outside the health care context, many morally admirable policies such as liberal immigration laws and openness to trade have the impact of both boosting overall economic growth and also exacerbating domestic income inequality. They’re also very good for poor people in the third world who want to have jobs in which they do stuff in exchange for money. Responding to growing inequality with ramped-up taxation and ramped-up social services makes these kind of policies more sustainable and serves the general interests of mankind.Also, let's face it, it's not like we can really tax the middle class too much more to begin with. Most of us are strapped. If you're going to have that kind of income inequality, then you're going to have to change your tax revenue picture too.
It's also very telling to see just how much Bush's tax cuts and the wars in Iraq and Afganistan contributed to the financial disaster we have today.
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