The economy is strong. We have the biggest middle class per capita in
the world. Social mobility is a reality for white males. Our education
system is the envy of the whole world. (I worked my way through college
with no debt.) We're crisscrossing the nation with a multimillion-dollar
road system. Our inflation rate is 2 to 3 percent. Unemployment is 3 to
4 percent. There is no debt. Social Security is solid and Medicare is
on the way.
But terror of all terrors this cannot be. The top marginal tax rate is
95 percent! Yes, from Truman, Eisenhower, Kennedy and Nixon the top
marginal tax rate ranged from 85 to 95 percent. Even though these poor
rich people were paying their fair share, only 4 percent were
unemployed.
Minimum wage was at its highest buying power ever, but inflation (the
argument by rich folks why minimum wage should stay low) was stable at 2
to 3 percent. The unions were as strong as they have ever been. Home
prices appreciated at about 2 percent so we didn't invest as a gamble
but as an investment for our retirement when our homes would be paid
off. Homes were affordable. One would get her loan from a "savings and
loan," not a bank. The savings and loan associations were highly
regulated so as to not risk more than they could afford. During this
period the booms and busts of the 19th and early 20th century didn't
happen anymore.
BOOMS AND BUSTS
But, starting with Carter and extending to today, the ultra-rich bought
off our politicians, mostly Republicans but with a fair share of Dems
too. Taxes took a nosedive to 35 percent. The banks became virtually
unregulated because of right wing pressure that this would energize the
economy. The ultra-rich took their manufacturing to other countries
because we, the working folk, were making too much money. The argument
was that, in the long run, we would all be better off. Booms and busts
became the norm again.
When times were good, the ultra-rich would claim that that was why they
were paid so much - because they were to be credited for the good times.
Then, during the recessions, they would claim that this was the way of
capitalism. "It's just the way it is so we had better get another tax
break so we can hire more people at poverty level wages just so we can
get the economy moving again." We have become a third world nation where
a tiny percentage own and control the country while the majority is
left with dregs.
A PLAN
So now that we've been using the principles of the right-wingers like
Olin Potter and Jim Hildebrande for 35 years, we should be in heaven,
right? Our infrastructure is in shambles, unemployment is at 9.5 percent
and, according to Mr. Potter, this is all the fault of two Democratic
Congressmen out of the total of 535. The right wing is appalling in its
inept hypocrisy. So I have a little plan: the goal of which is to create
the conditions for a large and varied middle class. "You can build a
house with labor and no capital but you can't build a house with capital
and no labor."
Minimum wage has to go up to $20 per hour (over a five-year period).
Free at point of purchase health care (more buying power for the workers).
A truly progressive income tax system:
No income tax until you reach $40,000 per year ($20 per hr).
About 10 brackets with the top marginal rate, say a million dollars per year, at 95 percent.
Inheritance tax at 0 percent up to $3 mil, then 100 percent (we want a strong middle class).
Capital gains taxed as normal income.
No sales tax.
Social Security taxes on up to $200,000 yearly income.
While this is short and simplistic, it is supported by historical
precedence. I'm open to suggestions and corrections, but only if they
value labor over capital.
Robin Lehman lives in Warren
