Take a breath America – What’s this Socialism talk?
Things are going wild in America lately – economically & politically, And like in the old westerns their are saloon rabble rousers trying to stir up the towns people. Today, they are the media mouths out there paid millions to whip us up in to a frenzy and scare us silly. (Just in time for Halloween) But we Americans, when the chips are down, we have a history of being brave, studying the problem and making the right decisions. In this, the final week of the 2008 campaign, I thought I’d go over some simple facts that may be missed in the echo chamber.
Obama’s Socialist policies? There are pundits, shute – candidates who are telling us the Obama tax plan will make socialists, even communists out of us and money will be ripped out of our hands and given to lazy welfare bums. We ought to no better – seeing as these are pretty much those who told us to vote for Bush – his permanent majority was the way to make America great for ever more.
Let’s look back in history. Progressive income tax began with the Sixteenth Amendment, and enjoyed the full support of the great Republican Teddy Roosevelt (and Senator McCain for that matter, until recently anyway). Today the rate is 36% and Obama wants to return it to the 39% of the Clinton years. Is that a lot? Well, In 1918 the top upper rate was set at 77% to pay off WWI. But in the 1920′s it was lowered in steps to 24%. Ironically, The roaring 20′s was a 12 year Republican era much like the W years with policies that favored the wealthy, loose Wall Street regulation and like W, it all crashed hard at the end leaving the country in some pretty rough shape.
The Republicans tried to fix things for three years after the crash but it only got worse. Finally in 1932, America switched to the Democrats who fired up government spending programs to put people back and immediately raised the upper tax rate to 62% to help pay for it. Republicans curse this New Deal to this very day, but it worked and in seven short years America surprised (and saved) the entire world with our remarkable economic strength. Admiral Yamamoto must have been believing the Rush Limbaugh’s of the day.
Throughout the 40′s, 50′s and start of the 60′s the American economy boomed – all the while the upper tax rate remained above 90%. The great American growth was fueled by a new middle class who just decades before were poor folks with their hands out – cursed by the Republicans then just like they do now. President Eisenhower endured much ire from Republicans when he refused to back lowering that 90% upper tax rate – but he didn’t budge, instead he took the money, paid on down our war debt and built a highway system with he rest. He won both times with a landslide.
Then in 1964 a Democratic congress & president began lowering it (possibly in back room trade offs needed for Civil Rights Act that same year.) The Reagan years ushered more drops to 50%, then 28% in the late 80′s. It is not coincident that our Federal deficits began their launch in to the stratosphere about the same time, If we don’t make it, I suppose historians will say this is where we got off track.
Where’s the logic in government taxing the wealthy for broad base spending programs? Well first off, freedom isn’t free – living in the land of the free isn’t free and running this great nation isn’t free – somebody has to pay something – sooner or later – us or our children. This idea that we can cut everybody’s taxes (rich first of course), fight wars, give out big no bid contracts, run up huge deficits, go shopping with our credit cards and not have it come down hard on us – thats fantasy land. Biden was right – it IS UN-AMERICAN – the height of irresponsibility. We know that, right?
By definition recession/depression is the downward spiral where something makes people stop buying and as a result, business quits paying people to build and sell, people get laid off and now they don’t have money to buy – more layoffs – and so on. So the solution? Get people buying & spending again. How? Put money in their hands – keep them working, producing and buying. Which people? The ones who will spend it – the cash strapped middle class – not the fat cats who will only rat hole the extra in off shore banks. What do the rich get out of the deal? – the return of a booming economy and chance to produce more and make money again if they want in the game, The argument that money in the hands of the already wealthy will induce them to create jobs to produce more makes no sense – why would they do that if no one is buying what’s already out there? With so few people having any money, they’d have to give it away. I don’t think too many rich folks are in to that.
The notion that this is some kind of welfare is hard to understand. If the pundits are referring to the Earned Income Tax Credit – which give tax credits to low income working people – to apply to their income tax, and if there’s some left over – they get it on their refund check. Well, I guess no one told Ronald Reagan it was welfare because he who made happen with the Reagan EIC expansion of 1986. It works too – giving single moms just enough of a leg up each year to buy what they couldn’t all year – like a better used car – or a washer & dryer – or new clothes for their kids. Ever bit goes back in to the economy – for one more round anywat before Walmart sends it to China. (But whats the difference to big multi-nationals corporations).
Finally, I hear some ridicule the Obama plan on business taxes – corpora
te and capital gains. Well – he lowers it for home grown small business and raises if for the big corporations with 100 million executives, the big private equity firms and acquisition cats that swallow up American small business, gut them and streamline by sending our jobs overseas – pocketing billions. Personally, while we’re at changing things, I don’t have a problem with giving small business a break and letting these guys carry the load for a while – do you?
George Lillard – Houston, Texas
Reference:
http://en.wikipedia.org/wiki/Taxation_in_the_United_States
http://en.wikipedia.org/wiki/Earned_Income_Tax_Credit
http://www.barackobama.com/issues/economy/
PS – I believe as Americans we
