Take From the Poor, Give to the Rich

The title, of course, is the McCain-Bush-Bush-Reagan-Greenspan Republicans always and forever tax policy. It has been an hugely successful policy - the past 28 years have seen an enormous transfer of wealth from the middle class and poor to the very rich. A perphaps unfortunate, but doubtless necessary, side effect has been an even larger transfer of wealth from the United States to Saudi Arabia, other oil exporters, and China.

I was reminded of this as I watched CNN while on the treadmill at the gym. A panel was comparing the Obama and McCain tax proposals. Oddly enough, many of the panelists stuck to the facts, noting that McCains tax proposals consisted of tiny tax cuts for poor and middle class plus big tax cuts for the rich and very big tax cuts for the very rich, while those proposed by Obama had much larger tax cuts for the poor and middle class, small tax increases for the upper-upper middle class, and substantial tax increases for the rich and super rich.

The ancient Republican hack on the panel complained bitterly that Obama's tax proposal was taking from the rich and giving to the poor, an imagery that would have been more credible if he or any other Republican had made the reverse observation when Reagan cut taxes for the rich while raising them for the working and middle classes.

These characterizations are of course dishonest, and designed to be emotionally loaded. In this golden age of crony capitalism the Republicans have consistently used the following strategy: cut nominal taxes by a pittance for most, cut taxes wholesale for the rich, and borrow the money to rule (or misrule). I call the tax cuts 'nominal' because of course the borrowed money will need to be repaid, one way or the other, though the rich and super rich will just take the fortunes they have accumulated in the meantime and move off shore, so they will likely escape any burdens. All that borrowing weakens the nation, of course, and strengthens its rivals and enemies - a price the Republicans have been too willing to pay.

Both McCain and Obama have proposed plans that will produce further deficits, probably inevitable in the current weak economy, but McCain's is both more expensive and less honest, since it produces huge deficits but pretends it doesn't by claiming to say trillions by cutting "earmarks" - a good idea, but hard to implement without public campaign financing, since the earmark system of semi-legalized bribery is the major basis of most current congressional campaign financing. The money involved is also about two orders of magnitude too small to balance McCain's budget.

Kevin Drum has a nice graph of the impact by income percentile.