Rolling Stone’s Tim Dickinson Explains “How the GOP Became the Party of the Rich”

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.

snapshot of Dickinson's Rolling Stone article

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.

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BREAKING: Ronald Reagan Was A Liberal Socialist Who Ate Children!

“We’re going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share. Such tax loopholes sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10 percent of his salary – and that’s crazy. Do you think the millionaire ought to pay more in taxes than the bus driver or less?”

The following quote comes from Saint Reagan, the GOP saint invoked to end arguments by simply saying, “That’s what Reagan did.”

Politics in this country have shifted so far to the right that what was once considered centrist, even center-right, is now considered “liberal.” *”liberal” said with disdain in the voice*

When an entire political party essentially advances the interests of the rich and declares war on everyone else economically, you know something is wrong. Too much Ayn Rand?

Elizabeth Warren on Taxes

Elizabeth Warren, who is now in the race to unseat Massachusetts Senator Scott Brown, had this to say about the basic concept of taxes…

There is nobody in this country who got rich on his own. Nobody. You built a factory out there – good for you.

But I want to be clear. You moved your goods to market on the roads that the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory…

Now look. You built a factory and it turned into something terrific or a great idea – God bless! Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

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My Two Cents on the 2010 California Ballot Propositions

I am not a fan of the ballot proposition but since I’m a voter I will take positions on them.

Prop 19 – “Regulate, Control and Tax Cannabis Act of 2010” – NO

I oppose this but not for the obvious reason; it would create a regulatory fiasco with city governments able to set their own taxes and regulations. Marijuana needs to be decriminalized, not only because it’s a victimless crime with less adverse effects than alcohol and smoking but also because it would reduce the amount of time, energy and money that goes into prosecuting people with marijuana. Legalize it…but not this way.

Prop 20 – “California Congressional Redistricting Initiative” – NO

Back in 2008, Prop 11 established an independent commission (made up of people of different parties and loyalties) that would be responsible for carving out districts for the California Assembly and Senate. Now, supporters of Prop 20 want that commission to be responsible for carving out congressional districts as well. It sounds fair but I have major problems with it:

First: How much money will this commission cost? There is no set price tag.

Second: The commission would be selected by the legislature. So much for an “independent” commission.

Third: The commission would be unaccountable to the public. We would not be able to appeal or challenge newly drawn districts.

*This proposition also conflicts with Prop 27 (see Prop 27)

Prop 21 – “Vehicle License Fee for Parks Act” – YES

This would place an $18 license fee on most vehicle registrations (excludes vehicles registered under the Commercial Vehicle Registration Act). 85% of the money raised by this surcharge would go toward maintaining California’s public parks and beaches, saving the state $130 million a year. Saving the state’s public recreational areas is worth the fee.

Prop 22 – “The Local Taxpayer, Public Safety, and Transportation Protection Act” – NO

This proposition would prevent the state from tapping into the funds of local governments in California. It sounds great: Keep the state from robbing local government. However, even if the state is in a fiscal crisis (like the one we’re in now) and some cities have surpluses, Prop 22 would prevent the state from taking funds. This ties down the hands of a legislature that can only work with a fraction of the budget as it is.

Prop 23  – “Suspend AB 32, the Global Warming Act of 2006” – NO

As the title says, AB 32 (Global Warming Act of 2006) would be suspended under Prop 23. This is a mistake. We need to continue cutting down carbon emissions to lessen the effects of global warming on our planet and to help make our air cleaner. The time for action is now. Our future depends on decisions like these.

Prop 24 – “Repeal of Corporate Tax Breaks” – YES

This would prevent recent, governor-approved tax breaks from benefiting the top 2% of corporations in California, saving the state roughly $1.3 billion annually. This is simply another way for big business to evade taxes.

Prop 25 – “Majority Vote for the Legislature to Pass the Budget Act” – YES

Currently, California is one of a few states that requires the approval of 2/3 of the legislature to pass a budget. As we’ve seen, this has been disastrous and cost the state billions of dollars (California has not passed a budget on time for 23 years). Prop 25 brings approval down to a simple majority (at least 51%).

Prop 26 – “Supermajority Vote to Pass New Taxes and Fees Act” – NO

If you think that the budget is terrible now, wait until Prop 26 in implemented. This would reduce tax revenues for the state, reeking havoc on public services and programs.

Prop 27 – “Elimination of the Citizen Redistricting Commission” – YES

This initiative would eliminate the voter-approved Citizen Redistricting Commission (Prop 11 2008 – “Voters First Act”) and return redistricting power to the California Legislature.

What advantage does the legislature have over this commission? The Legislature answers to us; the Citizen Redistricting Commission (CRC) does not. If we disagree with the way a district is constructed, we can appeal and challenge it or vote our representatives out of office. We lose this with the CRC. We have no control over who is chosen for the commission; we do over the Legislature.

*If both Prop 20 and 27 pass, which ever has more votes becomes law.

Even though I’ll be voting on these initiatives, I’m still against propositions. One of the many reasons why California is in such a horrible condition is because the voters have become the law makers. California voters restrict the powers of the Legislature and then wonder why they aren’t doing what they’re supposed to.

The beauty of a representative democracy (republic) is that it produces effective and just government. We elect professionals to govern in place of us. If our representatives are doing poorly, we have the power to vote them out or demand their resignations…or impeachments.

Pure democracy produces chaos, ignorance and inequality. Whether driven by fear, anger or prejudice, the general public can enact disastrous policies that destroy budgets or deny a minority population their rights. Plato was onto something…

Hopefully, California will lead the nation by abolishing the initiative process.

Until then, vote intelligently.