Bush Era Tax Cuts for Millionaires Debate: Déjà Vu All Over Again

1931 was the third year of the Great Depression. There was a great debate whether tax increases should be levied against the rich to help restore fiscal sanity and provide much needed cash to help the vulnerable. Today as we enter the third year of the Great Recession, the same debate is surfacing whether the Bush Era tax cuts should be extended for those with earned incomes over $250,000. All seem to agree those earning less than that are entitled to an extension.

Senator George Norris (Nebraska) Progressive visionary of public power and social justice

Progressives in the House such as Fiorello LaGuardia  and James Frear (Wisconsin) attempted to sponsor legislation to impose tax increases on the wealthy. In the Senate, older progressives such as Idaho’s William Borah and “Muscle Shoals” George  Norris of Nebraska joined forces to create real progressivity.  The arguments against this today are that the rich should not be taxed because during times of economic stagnation, no one can afford to have less discretionary income. The same folks that decry deficit spending are in the vanguard of advocating no revenue increases for the government through increasing taxation on the rich.

Fiorello LaGuardia, (R) of New York questioned the sincerity of those in 1931 who demanded a balanced budget while simultaneously opposing increasing inheritance and gift taxes. Senator Norris, even during the Great War (WWI) had worked on such legislation according to Howard Zinn in his LaGuardia in Congress. Norris spoke eloquently for tax increases on the privileged few during the Great Depression to create distributive justice and share the wealth as millions were on the streets hungry and forlorn:

“The danger I see ahead for our country is in the enormous combinations of wealth…To meet this danger a small group has advocated the levying of a progressive inheritance tax which would break up the immense fortunes and the increasing of income taxes on large incomes to prevent the accumulation of such large fortunes.”

While such proposals did not become legislation and would have certainly been vetoed by the ineffectual Herbert Hoover, it is striking that the arguments today are similar to those during the Great Depression. So called fiscal conservatives are eager to enhance the acquisition of more wealth by those who don’t need it and at the same time decry the 14 trillion dollar national debt. Republicans demand the president return to the center but have no programme to create jobs, mitigate the foreclosure crisis with home mortgages under water and create public works to end the recession.

During the Great Depression there were deficit hawks as well whose primary concern was to balance the budget. This was the mantra of President Hoover and the Republicans (plus some Democrats) in Congress. Keynesian economics still rules but its application should not be all encompassing. Yes fiscal policy should run deficits through borrowing. Yes priming the pump does require public works. Yes taxes should be lowered but not for all. They should be increased on capital who are not entitled to keeping all their wealth at the expense of the “nation” or the well-being of the “community.” There must be reasonable limits to the acquisition of wealth and the requirement that those who have so much must share more with those who have so little.

It is a sorry state that in both 1931 and 2010 the twin currents of greed and unbridled accumulation are so dominant. The ethos that prevents socialised medicine and a single payer is the same ethos that cynically refers to small business as the alleged victim of reversing tax cuts on the wealthy during times of economic stagnation and burgeoning public debt.

This entry was posted in Politics/Music/Culture. Bookmark the permalink.

Leave a Reply