Some of you may have been offended or amused by GOP presidential candidate Tommy Thompson’s gaffe before a Jewish audience the other day, wherein he allowed as how:”I’m in the private sector and for the first time in my life I’m earning money. You know that’s sort of part of the Jewish tradition.”Thompson’s hilariously counterproductive efforts to dig himself out of his use of Jewish stereotypes are one thing. As Mark Schmitt usefully noted over at TAPPED, his remarks were also offensive insofar as they implied he wasn’t actually earning his pay during his many years of public service, as compared to his recent “private sector” gigs at places like Akin, Gump, where he is presumably pulling down big bucks to show the company flag while actually running for president.But let’s take this up another notch. The other planted axiom in Thompson’s riff is an even more invidious and important one: the idea that the ability to pull down large sums of money constitutes “earning”–in the moral, not the mechanical sense–that income, implying an identity between wealth and virtue.This is indeed an attitude that’s deeply engrained in the American psyche, and that does help explain our relatively high tolerance for economic inequality. But it doesn’t survive much genuine reflection.Since we have created the largest upper class in human history, is one to deduce that the current generation of wealthy Americans is the most moral, the hardest working, the most responsible group of people to grace the planet? Does anyone really think that, say, the millions of unfortunate people who couldn’t find jobs during the Great Depression were morally inferior to, or lazier than, today’s millionaires? Probably not, yet the self-congratulation that so often accompanies such wealth accumulation, particularly when accompanied by the belief that taxation is virtually theft, seems to reflect that point of view.There’s no question that any capitalist economy is going to reward some skills and assets more than others, and create some level of inequality, and much of the western world’s economic policy debates over the last couple of centuries have revolved around prudential questions about the degree to which such inequality is necessary or incidental to the efficiency of markets.But that’s economics, not ethics, and it’s more than a little important to keep them straight. The kind of inequality this country has today may or may not be a byproduct of economic forces that we must at least respect, even if we decide to override them in the interests of a more decent society, or in the pursuit of a more stable and long-term prosperity. But there’s nothing “natural” or “moral” about vast inequality, and its tribunes must be challenged every time they try to pretend otherwise, even through the sloppy use of words like “earned.”
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Editor’s Corner
By Ed Kilgore
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April 25: Democrats Dodge Bullet As Trump Kills Higher Income Tax on the Wealthy
Sometimes dogs that don’t bark are very significant, and I noted one at New York:
Republicans have both an arithmetic and a messaging problem as they try to enact Donald Trump’s second-term agenda via a giant budget-reconciliation bill. The former involves finding a way to pay for the $4 trillion-plus tax cuts Trump has demanded, along with a half-trillion or so in border security and defense spending increases. And the latter flows from the necessity of hammering popular federal programs (especially Medicaid) to avoid boosting budget deficits that are already out of control from the perspective of conservatives. This sets up Democrats nicely to deplore the whole mess as a matter of “cutting Medicaid to pay for tax cuts for Trump’s billionaire friends,” a very effective message that has vulnerable House Republicans worried.
To interrupt this line of attack while making the overall agenda slightly more affordable, anonymous White House sources lofted a trial balloon earlier this month via a Fox News report:
“White House aides are quietly floating a proposal within the House GOP that would raise the tax rate for people making more than $1 million to 40%, two sources familiar with discussions told Fox News Digital, to offset the cost of eliminating taxes on overtime pay, tipped wages, and retirees’ Social Security.
“The sources stressed the discussions were only preliminary, and the plan is one of many being talked about as congressional Republicans work on advancing President Donald Trump’s agenda via the budget reconciliation process.
“Trump and his White House have not yet taken a position on the matter, but the idea is being looked at by his aides and staff on Capitol Hill.”
The idea wasn’t as shocking as it might seem. Trump’s 2017 tax cuts reduced the top income-tax rate from 39.6 percent to 37 percent, so just letting that provision expire would accomplish the near-40 percent rate without disturbing other goodies for rich people in the 2017 bill like corporate-tax cuts, estate-tax cuts, and a relaxed alternative minimum tax for both individuals and corporations. One House Republican, Pennsylvania’s Dan Meuser, suggested resetting the top individual tax rate at 38.6 percent, still a reduction from pre-2017 levels but a “tax increase on the rich” as compared to current policies.
Crafty as this approach might have been as a way of boosting claims that Trump had aligned the GOP with middle-class voters (the intended beneficiaries of his recent tax-cut proposals) rather than the very rich, the idea of backing any tax increase on the allegedly super-productive job creators at the top of the economic pyramid struck many Republicans as the worst imaginable heresy. You could plausibly argue that total opposition to higher taxes, or even to progressive taxes, was the holy grail for the party, more foundational than any other principle and one of the remaining links between pre-Trump and MAGA conservatism. At the very idea of fuzzing up the tax-cut gospel, old GOP warhorses like Newt Gingrich and Americans for Tax Reform’s Grover Norquist arose from their political rest homes to shout: unclean! Gingrich called it the worst potential betrayal of the Cause since George H.W. Bush cut a bipartisan deficit-reduction deal in 1990 that included a tax increase.
As it happens, it was all a mirage. In virtual unison, both Trump and House Speaker Mike Johnson have said a high-end tax cut won’t happen this year, as Politico reports:
“President Donald Trump and House Speaker Mike Johnson on Wednesday came out against a tax hike on the wealthiest Americans — likely putting the nail in the coffin of the idea.
“Trump told reporters in the Oval Office that he thought the idea would be ‘very disruptive’ because it would prompt wealthy people to leave the country. …
“Johnson separately knocked the idea earlier in the day, saying that he is ‘not in favor of raising the tax rates because our party is the group that stands against that traditionally.’”
Trump’s real fear may be that wealthy people would leave the GOP rather than the country. Many are already upset about Trump’s 19th-century protectionist tariff agenda and its effects on the investor class. Subordinating the tax-cut gospel to other MAGA goals might push some of them over the edge. As for Johnson, the Speaker is having to cope with the eternal grumbling of the House Freedom Caucus, where domestic budget cuts are considered a delightful thing in itself and the idea of boosting anyone’s taxes to succor the parasites receiving Medicaid benefits is horrifying.
If Trump’s “big, beautiful” reconciliation bill runs into trouble or if Democrats set the table for a big midterm comeback wielding the “cutting Medicaid to give billionaires a tax break” message, squashing the symbolic gesture of a small boost in federal income-tax rates for the wealthy may be viewed in retrospect as a lost opportunity for the GOP. For the time being, that party’s bond with America’s oligarchs and their would-be imitators stands intact.