The debate over the Buffet Rule yesterday in the Senate has made it clear that neither party is serious about raising revenue, otherwise known as raising taxes. I understand that no one likes being taxed, but do you find it strange that lots of really smart people are begging for it?
Fine - then I have another reason to support more taxes – they work. Let’s take a stroll though the last 75 years of US history, shall we?
In the 1950s and 1960s, when the highest marginal tax rates ranged from 70 to 92%, America built the interstate highway system, put a man on the moon, made our education system the envy of the world -- and had a thriving middle class and an economy that was unparalleled in the world.
In the 1970s and 1980s we tried "trickle down" tax policies for the richest few, and they failed – by any measure.
In the 1990s, President Clinton told millionaires and big corporations to pay their fair share and we got millions of new jobs and strong economic growth.
But by the time the new millennium rolled around, the Bush tax cuts exploded the deficit while failing to create jobs. The United States currently ranks almost last among modern nations in the amount raised from taxpayers as a share of our national economy.
So, did you by chance notice a pattern? Cut taxes, and bad things happen. Raise taxes, and good things happen. The average tax rate paid by the richest of the richest few -- the wealthiest 0.1% -- is at nearly the lowest rate in over 50 years. Based on historic trends, that does not bode well for the future.
Poll after poll after poll shows that most Americans support proposals like the Buffett Rule to have millionaires and wealthiest few pay higher taxes. More than two-thirds of Americans also think the federal tax system benefits the rich and is unfair to ordinary workers. Warren Buffett, Bill Gates, Mark Zuckerberg, Mike Bloomberg, and hundreds of "patriotic millionaires" say the wealthiest Americans like them should do what's right and pay higher taxes. Yet somehow tax rates in America overall are at historic lows and our government hasn't collected this little in taxes as a share of our economy since World War II.
I know everyone hates taxes – so do I. But I hate getting out of bed every morning too, but I do it because I know it’s best that I don’t sleep ‘till noon. That’s what responsible people do – make decisions knowing that it’s better to do what we know to be best rather than what just feels right.
Cutting taxes may “feel” right, but it’s dead wrong.