America Is Worth Paying For

The Wall Street Journal today takes a look at inequality and produces a startling statistic.

The nation's wealth gap is widening amid an uproar about lofty pay packages in the financial world.

Executives and other highly compensated employees now receive more than one-third of all pay in the U.S., according to a Wall Street Journal analysis of Social Security Administration data -- without counting billions of dollars more in pay that remains off federal radar screens that measure wages and salaries.

Highly paid employees received nearly $2.1 trillion of the $6.4 trillion in total U.S. pay in 2007, the latest figures available.

So much for trickle-down economics. Incidentally, the same people who tell you that the top 1% pay 30% of the taxes won't tell you that they also make 30% of the money, or that the after-tax income, adjusted for inflation, of the top 1% grew 256% over the past 25 years, compared to just 21% for those in the middle. So the rich are doing pretty well, and they can probably pony up so that nobody goes without health care in this country.

This brings us to a larger point about the success of the conservative movement in this country. Despite this extreme inequality, which causes asset bubbles, threatens programs like Social Security that cap payroll deductions at $100,000 a year and invariably destroys national economies, talk about progressive taxation - indeed, any taxation - is considered heresy.

One of the bigger, but more under-reported, sea changes in American politics is how any kind of tax increase -- whether in war or peace, good economic times or bad ones -- has become absolutely unacceptable. After all, Ronald Reagan raised taxes. So did every modern American president involved in war, until George W. Bush. But not anymore. Indeed, as one of us pointed out on Nightly News last night, only 29% (or 157) of the 535 and House members and senators serving in Congress were around the last time -- 1993! -- the federal government raised taxes, and that was on gasoline. Think about that for a moment: Congress hasn't really had a TOUGH vote in 16 years, if one defines a "TOUGH" vote as the government asking for a financial sacrifice from the American people. This is the political climate that President Obama faces in trying to pay for health reform. Republicans and some Democrats are opposed to a tax on the wealthy, and unions and Obama's political strategists are against taxing health benefits.

Congress raised the tobacco tax this year to pay for expansion of children's health care, but the point is basically true.

Barack Obama has not been a profile in courage on this front, stressing a tax cut for "95% of all Americans" and failing to act definitively to roll back the Bush tax cuts on the wealthy. Joe Biden made one statement during the campaign about how it's patriotic to pay taxes and he got rapped on the skull for it, and we never heard it again.

But look. If Democrats cannot stand up and say that America is worth paying for, that we have an overclass in this country that's had it very good for a long, long time, that rampant inequality threatens economic stability, and that the way to a sustainable future includes paying for the commons that we all share, we'll really never get anywhere. Republicans have made taxes more of a four-letter word than liberals, to the extent that they threw an entire round of tax "tea parties" despite Obama having cut taxes in the stimulus for practically everyone. Conservatives since the Reagan era have determined that America has an innate selfishness that they can exploit, to claim "the other guy" is getting your tax money, and everyone should resist it. As government has provided little of perceived tangible value since the invention of Medicare in the 1960s, they've been able to get away with this. But it's not a path that can hold.

It starts by making the argument that while nobody likes taxes, nobody builds their own roads, or schools, or police and fire departments, or health care infrastructure, and government needs to act as a provider of services. This is basic stuff that has been pushed aside in our national debate for far too long. In the final analysis, we have a selfish and cruel segment of society that has been allowed to rule the roost for decades, promising their constituents endless services and endlessly low taxes forever. Democrats have the choice of accepting that and permanently nibbling around the edges the few times they get into power, or making the argument that we can have a better society.