One thing that Matt Taibbi gets right – and that a lot of critics of the Occupy movement get wrong — is that the anger that is driving the left isn’t about envy of the rich. Rather, it reflects the broad sense, common on the right as well as the left, that there has been a moral rupture in our society that hasn’t been healed. Taibbi doesn’t use this language exactly, but it’s how I think of it: we can think of a series of moments in our history as “moral ruptures,” during which elites have failed the larger public. The usual response to a moral rupture is a kind of ritual cleansing or ritual purification. After Watergate, for example, there was a wave of campaign finance regulation. These new regulations did virtually nothing to improve the quality of our democracy, yet they did create the sense that “something had been done.” The corporate scandals were followed by Sarbanes-Oxley and another wave of campaign finance regulation, which, respectively, made it more attractive to remain a closely-held business enterprise and more attractive to form an independent campaign expenditure group than to work through the traditional (and accountable) political parties. The Iraq invasion prompted a different response: the surge strategy really did create the sense — critics would call it the illusion — that a wrong had been righted. This is despite the fact that opponents of the Iraq invasion could still claim that salvaging the mission didn’t actually redeem it.
So consider the fact that after the “moral rupture” that was the financial crisis and the original response (TARP, etc.) was never really followed by a ritual cleansing. The public has arguably been casting about for someone or some movement to articulate the desire for ritual cleansing. This created an opportunity for political entrepreneurship, which was at first seized by the Tea Party movement. The Tea Party movement, however, hasn’t offered a critique of, say, the financial system that has proven sufficiently compelling to voters who haven’t already embraced right-of-center political views. Moreover, their critique was not aligned with the interests of organized public workers and other groups that sense that their political position has grown more vulnerable in a climate defined by straitened resources, due to collapsing tax revenues, etc.
It’s not envy. It is moral anger that tends to gravitate towards certain appealing targets.
It was, however, frustrating to see Taibbi transcribe Warren Buffett’s core contention that he pays less in taxes than his various employees without making reference to the incidence of the corporate income tax, a subject that Phil Levy of AEI has clarified. Alicia Munnell, who advocates a much higher tax burden, said it well:
Warren Buffett has been making the point whenever possible that he pays a smaller percent of his income to the federal government than his secretary. President Obama regularly incorporates the plight of Mr. Buffett and his secretary into his speeches. The problems with Mr. Buffett’s statement are twofold: 1) his tax situation is not representative of high-income people generally; and 2) he diverts attention from the larger picture that we Americans under-tax ourselves. In the view of most economists a well-designed tax system will have tax rates that rise with income. Under such a structure, high-income people pay not only higher taxes but also a higher percentage of their income in taxes. The rates in the Federal personal income tax currently range from 10 percent for incomes under $8,500 to 35 percent on incomes over $379,150. For the population as a whole, these progressive marginal rates appear to translate into a progressive overall tax burden.
Munnell isn’t in the outrage business, and it is a safe bet that her analysis will be ignored. That is a shame. I don’t think it would have weakened Taibbi’s case very much to those who are inclined to embrace it to acknowledge this more complicated picture. The thing about Munnell’s take is that its implication is that it is, say, the top 80% and not just the top 1% that is complicit in our fiscal dilemma.