The economic challenges we face are myriad and daunting. The unemployment rate is hovering near 10 percent. Our energy policy is stuck in the 20th century. We’ve got crumbling infrastructure all over the place. The budget is projected to remain badly out of balance. And perhaps most troubling, the middle class is barely keeping its head above water. Tax cuts for rich people address precisely none of these pressing issues. They would actually make matters worse in some cases.
Why, then, are we even discussing the possibility of cutting taxes for rich people? Is it because they’ve been hit particularly hard by the recession? Hardly. When the National Bureau of Economic Research announced recently that the Great Recession came to an end in June of last year that news must have come as quite a shock to the millions of Americans who are still out of work, working fewer hours for less pay, and struggling to make ends meet. But it probably didn’t surprise people at the top of the income ladder. They’ve been recovering quite nicely...
It should come as no surprise, then, that income inequality is fast approaching record levels. The richest 5 percent of Americans claimed almost 22 percent of all income in 2009, and the top fifth took home fully half of the nation’s income. The poorest fifth, meanwhile, earned just 3.4 percent of all the income, and the share of national income going to the vast middle dipped as well. Income inequality in 2009 was higher than at any point since at least 1967, according to one measure.
All those facts and figures reinforce what most people already know: The middle class took this recession right on the chin while the rich suffered no more than a glancing blow. And yet somehow in Washington the talk is all about tax cuts for rich people.
As I said in a recent post one of the big reasons we are talking about tax cuts for the rich is that almost all of our legislators in Washington are rich. The rich are their friends. The rich have easy access to Washington legislators, much easier than the middle class or poor. And so when they whine about their "high" taxes they get listened to.