I'm always amazed that so many of my friends buy into this BS from the R's. Not withstanding my friends apparently sympathy for the idle rich, all my friends work for a living. It never seems to occur to them that these policies only place a bigger burden on them – wage earners—to pay for the cost of government.The Bush tax cuts have, of course, heavily favored the very, very well off. But they have also, more specifically, favored unearned income over earned income - or, if you prefer, investment returns over wages. Last year Daniel Altman pointed out in The New York Times that Mr. Bush's proposals, if fully adopted, "could eliminate almost all taxes on investment income and wealth for almost all Americans." Mr. Bush hasn't yet gotten all he wants, but he has taken a large step toward a system in which only labor income is taxed.
The political problem with a policy favoring investment returns over wages is that a vast majority of Americans derive their income primarily from wages, and that the bulk of investment income goes to a small elite. How, then, can such a policy be sold? By promising that everyone can join the elite.
Right now, the ownership of stocks and bonds is highly concentrated. Conservatives like to point out that a majority of American families now own stock, but that's a misleading statistic because most of those "investors" have only a small stake in the market. The Congressional Budget Office estimates that more than half of corporate profits ultimately accrue to the wealthiest 1 percent of taxpayers, while only about 8 percent go to the bottom 60 percent. If the "ownership society" means anything, it means spreading investment income more widely - a laudable goal, if achievable.
Of course, it also never seems to occur to these friends that deficits today must be paid sometime, so maybe the problem is the company I keep.
People get the government they deserve.
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