The challenge for progressives and Democrats in these turbulent times is how to consistently and clearly explain the real causes of our current economic condition.
One problem is that we live in a center-left country with a center-right media that consistently misinforms people about the perils of debts, deficits, and tax increases, and purveys misinformation about a good but modest health care bill that rightwing talk radio, tea partiers and GOPsters would have Americans believe is a "socialist" power grab.
It’s against that political backdrop that a just-released report from Wealth for the Common Good–a network of business leaders, high-income households and partners working together to promote shared prosperity and fair taxation–is a welcome and common sense antidote. History is always important, especially in the "US of Amnesia"–as writer Gore Vidal once put it–and this tight, fact-filled report gives us the history we need to understand how enormous tax cuts over the last 50 years have favored the wealthiest Americans at the expense of a strong and secure middle class. Its must-read facts and common sense ideas deserve and demand as much media attention as the tea partiers’ kvetching.
What’s crystal clear in this well-documented report–whose title might have been "The Real Story Behind Today’s Unfair Economy"–is that the middle-class has largely been shafted by both Republicans and Democrats, whose campaign coffers are equally greased by wealthy donors. And the shift in the tax burden has fueled a rising inequality and concentration of wealth that weakens our democracy–as The Nation argued in its June 30, 2008 special issue, "The New Inequality."
That shift is clear just looking at the tax rates paid by the wealthiest Americans. From 1950 to 1963–even under that radical Republican President Dwight Eisenhower–the federal tax rate on personal income over $400,000 never dropped below 91 percent. Between 1936 and 1980 it never dropped below 70 percent. But today, the top personal income tax rate after the 2001 Bush tax cut is just 35 percent, and you can count on one hell of a fight with ConservaDems and the GOP just to let that expire at the end of this year so the rate will return to the modest 39.6 percent level of the Clinton years. The tax rate on capital gains–which most benefits those in the highest income brackets–dropped to 15 percent in 2003, down from as high as 39.9 percent in 1977.