Warren Buffett made headlines the other day when he said on ABC that “people at the high end, people like me, should be paying a lot more taxes. We have it better than we’ve ever had it.”
It’s sign of the times that economic sanity only gets traction when it comes from the mouth of a multi-billionaire. Unfortunately for the American middle class, that traction is still pretty limited. That’s because Warren Buffett’s inconvenient truth stands in the way of the number-one priority of the newly empowered Republican Party. For the broken-clock brigade, no time is a bad time for more tax cuts for the super-rich.
For thirty years, the share of those at the top has been skyrocketing while the middle class struggles. The top .1% of households — one out of every 1,000 — has seen its share of national income almost quintuple, and now takes home about one out of every eight dollars of pre-tax income in the United States.
You’d think that against this backdrop politicians would have asked those who have done so well to pay a little larger share of their stratospheric incomes in taxes. Instead, taxes have been slashed on the highest earners, and it’s the middle class and the most economically desperate who are now being told they must tighten their belts: no extensions of unemployment benefits; huge cuts in social programs that will result in big layoffs of teachers and first responders; diminished services for the neediest. The human and economic costs mount.
For the new power-brokers in Washington, however, the times they aren’t a’changing. The GOP, with its new majority in the House, backed by a resurgent business community and facing a chastened Democratic Party, is doubling down on the refrain it has sustained for thirty years: the solution to our economic problems is more tax cuts for the most privileged among us, along with the freeing of business from tiresome regulation (like those for Wall Street that might have prevented the current economic calamity).
The GOP’s current version of the refrain is that tax breaks for the rich are crucial because they create jobs: poor people don’t create jobs, rich people do. As Rand Paul colorfully puts it, don’t talk about the gap between the rich and the rest because we are all in this together: “there are no rich, there are no poor.” Leave aside that this is a pernicious myth — the rich may hire but it is a society full of energy, innovation and opportunity, built by scientists, educators and entrepreneurs of all types, that creates jobs.
The easy way to see the GOP’s true motives is that no matter what happens in the real world, the clock they read always says the same thing. If budgets are flush cut (high-end) taxes because the people deserve their money back. If budgets are in deficit, cut (high-end) taxes because it generates new revenues. Peace? Cut taxes. War? As Tom DeLay once said, “nothing is more important in the face of a war than cutting taxes.” For the GOP, it’s always tax-cut time, and the group that always needs the tax cuts the most are those at the very top.
Leave the last word to Mr. Buffett. Presented with the GOP argument about the rich fueling the economy, he cut through the smoke: “The rich are always going to say that, you know. ‘Just give us more money, and we’ll go out and spend more, and then it will all trickle down to the rest of you.’ But that has not worked the last 10 years and I hope the American public is catching on.”
Jacob S. Hacker and Paul Pierson are the authors of Winner-Take-All Politics: How Washington Made the Rich Richer–And Turned Its Back on the Middle Class