Rolling Stone‘s Tim Dickinson wrote a brilliant article a few days ago with a simple, analogous title: “How the GOP Became the Party of the Rich.”
You cannot truly understand the modern Republican Party without understanding what happened in the late 20th century to the American economy and tax code. Historically, the Republican Party was the party of higher taxes. To pay for the many wars America entered into and investments in infrastructure, education and science, tax rates for the rich were pretty high. When John F. Kennedy (yes, that Catholic Democrat with good hair) cut taxes in the 1960s, the top rate was at 70 percent. In case you forgot, America’s Middle Class boomed in the mid 20th century.
When inflation pushed many Americans into higher tax brackets in the 1970s, fiscal conservatives like Ronald Reagan rose in popularity. Reagan’s image and message resonated with many who became disenchanted with the American Dream in the decade of anti-war riots, vast social change, Watergate and a frightening oil crisis. As Dickinson writes, Reagan “sold the country” on what was called an “across-the-board” tax cut that brought the top rate down to 50 percent.
The Reagan presidency was incredibly expensive to the American people. Defense spending went through the roof as taxes went down overall. Sure, Reagan raised taxes 11 times in eight years to help pay (somewhat) for his tax cuts for the rich and Cold War dominance. In 1980, the top marginal tax rate was 70 percent. By 1990, it was 28 percent. When President George H.W. Bush raised taxes to help close the deficit, he lost his second term, thanks to a man named Grover Norquist.
If it weren’t for the billionaire Koch brothers, who pretty much single-handedly funded the Tea Party movement, Grover Norquist would be the leader of the modern Republican Party. Norquist runs the ironically-named group “Americans For Tax Reform,” an organization dedicated to fighting any and all tax hikes by intimidating Republican politicians into never voting/acting to raise taxes. When President George H.W. Bush lapsed on his promise to never raise taxes, he paid for his N0rquist betrayal with his presidency.
Fast-forward to 2011, where the United States of America is suffering the effects of the worst economic recession since the Great Depression. President George W. Bush led America into two wars and enacted expensive policies while at the same slashing taxes to historical lows. In the past, America would raise taxes to pay for things like wars, prescription drug and education programs. But thanks to the anti-tax likes of Norquist, taxes for the richest Americans are at historical lows while the rest of the country suffers through cuts in education, public safety and welfare. Some of the largest American corporations in the world didn’t even pay any taxes in 2010…we actually continue to pay them billions of dollars in tax breaks as they continue to cut jobs. The cost to the US has been trillions of dollars.
As Dickinson explains, tax breaks actually cost more than all that is taken in from taxes, $1.2 trillion to $1.1 trillion. During the last debt ceiling debacle in Congress, Republicans refused to budge in negotiations (thank you, Tea Party and Grover Norquist). Democrats were willing to cut spending and lower taxes for the Middle Class and poor in return for letting the Bush Tax Cuts expire, which would return the top marginal tax rate to what it was under President Clinton, 39.6 percent, and bring in much-needed revenue. Republicans refused because it would “hurt” job creation.
One wonders what Ronald Reagan would think of his own party today. GOP presidential candidates love invoking Reagan when talking about how cutting government is always a good thing. Even Reagan’s former budget director, David Stockman, thinks the modern Republican Party exists to service the rich:
“The Republican Party has totally abdicated its job in our democracy, which is to act as the guardian of fiscal discipline and responsibility. They’re on an anti-tax jihad – one that benefits the prosperous classes.”
Dickinson also quoted Bruce Bartlett, one of the architects of the 1981 tax cut (that brought the top rate down from 70 percent to 50):
“Taxes are ridiculously low! And yet the mantra of the Republican Party is ‘Tax cuts raise growth.’ So – where’s the fucking growth?”
Dickinson’s in-depth, brilliantly written article is on Rolling Stone‘s website. If you have the time to read it (it’s long), I highly recommend that you do.