Wednesday, June 18, 2008

McCainonomics

A New York Times article today asks McCain to be more forthcoming on the real cost of his tax plan: http://www.nytimes.com/2008/06/18/business/18leonhardt.html?_r=1&oref=slogin&ref=todayspaper&pagewanted=print. Two things he wants to do that could be very damaging to the country and increase the deficit substantially are to eliminate the Alternative Minimum Tax and to make the Bush tax cuts permanent. Each of these will cost the federal government substantial amounts of revenue and again give most of the benefit to the wealthy. In a country where the income gap continues to rise and the idea of the segmented labor market (in which two labor markets exist: one for the elites and another for everyone else) will worsen.

As the U.S. economy continues to suffer from short term trouble and long-term peril, one wonders how this sort of policy irresponsibility can go on. Isn't it time to seriously question tax policy in America? The rich are getting richer and the super rich are not holding up their end of the economy. Under Eisenhower, the top tax rate was 90%. Under Carter it was still 70%. Today it is 35%. How can we justify this as the deficit soars and the quality of life of the average American continues to decline? The only thing keeping federal and state budgets solvent is a dramatic increase in consumption (otherwise known as regressive) taxes. In other words, the burden of taxation has moved from the upper class to the middle and working class, by increasing things like tolls, sales tax, user taxes and other taxes on consumption. This is how Republicans like it.

Will the American people (and the media) start to really cover this issue and stop assuming they will themselves one day be rich and thus support irresponsible tax breaks for corporations and the wealthy? One hopes a reasoned debate occurs on taxes and the irresponsibility of McCain in attempting to continue the policy of tax cuts for the rich, at a time when what we really need is a more fair distribution of income and wealth to keep the country economically strong and socially viable for the long run.

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