A lot of liberal bloggers are drooling over the We Are the 99 Percent blog that is associated with the Occupy Wall Street movement. I actually find the blog pretty annoying. Partly that’s because because it is so heavy on complaints from people with college (and even postgraduate) degrees, a group that certainly is not bearing the brunt of the economic downturn. But the bigger problem is that the blog is based on a premise that is unhealthy not just for the left but for our political discourse as a whole.
The 99th percentile of Americans, by income, starts with households earning incomes of $593,000. The “We Are the 99 percent” branding puts somebody making $500,000 per year on the oppressed-and-downtrodden side of the wage divide. Indeed, “99 percent” is so expansive a designation that it includes most of the bankers working on Wall Street.
There is an obsession on the left—fueled by Barack Obama’s incompatible twin efforts to close an enormous budget gap and hold families making less than $250,000 per year harmless from tax increases—with soaking the super-rich. But if you truly believe that the government needs more revenue to provide valuable services, you need to look where the money is, and much of that’s in the top quintile (households making over $111,000) but outside the top 1 percent.
Obama’s campaign promise has boxed him in on tax policy, leaving him talking about the need for tax revenue but only able to propose gimmicky soak-the-rich taxes that would do outsized economic damage relative to the revenue they raise, and are political nonstarters in the Republican House. There’s been a lot of criticism of Republicans running away from tax reform proposals like Bowles-Simpson because they include net tax increases, but the President also shied away from that plan, perhaps because it would have raised taxes on many filers earning less than $250,000.
Now, even the far left seems to be endorsing the idea that we can pay for government without touching the poor, the middle class, or even people who are, quite frankly, rich—just not super-rich. If government does valuable and important things, and can’t afford to pay for them with our current tax code, why has it become a consensus view that the vast majority of Americans should get a pass on paying more?
I don’t mean to encourage the Occupy Wall Street protesters to shift their class-warfare target and aim lower. But I do think further reinforcement of the idea that we can make everything better by taking more money from a small elite of super-rich people is unhealthy regardless of where you stand on the political spectrum.
I ultimately want a deal along the lines of Bowles-Simpson—something that will reform entitlements and restrain spending growth while raising federal revenues to something like 21 percent of GDP—and to do that, we’ll have to raise taxes on more than just the super-rich. (I was very glad to see Chris Christie endorse the plan in his Reagan Library speech last week.) If you’re to my left and want more government spending than I do, it’s even more important to understand that a broad-based tax increase will be necessary. And if you’re to my right, you certainly should want to puncture the idea that Millionaire’s Taxes are an easy fix to our fiscal problems.