Monday, January 25, 2010

Dr. Paul’s diagnosis

So long as we practice triage along the way, radical change is okay.  Actually, radical change is upon us whether we practice triage or not.  The mystery to me is how we can get representatives in Congress who aren’t merely pimps for the moneyed interests that got them in.  At a time when the federal budget is hemorrhaging, income (and wealth) inequality is at century-level highs, and marginal income tax rates on super-high incomes are at multi-generational lows, why isn’t the government asking those who can afford it to do a little more?  The share of income going to the top 10 percent is 50 percent!  The share going to the top 1 percent is more than a fifth!  The share going to the top 0.01 percent is 6 percent! Why can’t these people pull their oar?  (See this paper by Emmanual Saez.) 

Shouldn’t this be a no-brainer?  And we don’t even hear it being discussed.  Disgusting.

I will just note in passing that I don’t believe these people have done anything fundamentally to deserve these incomes.  The heads of major corporations thirty years or forty ago, when America was growing far faster than it is now, were content with much smaller multiples of average incomes—as are heads of corporations in other developed nations.  Almost as if they recognized that they alone were not responsible for the company’s creation of jobs and wealth!  Our ruling class has done this because we let them do it.  They have manipulated incomes before tax to their advantage, and then gutted the progressivity of the federal income tax to ensure maximum possible personal benefit.  And the charming Pied Piper who sold this bill of goods to the American people was Ronald Reagan.


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