Mickey Kaus @ Slate says who cares how rich someone is? If we care about “(attainable) social equality rather than (unattainable) income equality” then we should look at different fixes than adjusting tax rates. (That’s “if”, because apparently moral imperatives about social equality are so yesterday.)
Kaus is ranting about one of the NYT pieces on class, that talks about the rich getting richer & the tax cuts that disproportionately benefit the rich. This is his pet peeve, I guess: “Tax cuts don’t make people rich!” Well, duh. Nobody needs Mickey Kaus to tell them that tax cuts are not the source of wealth. Nobody says so! (Except in documented instances of exceptionally obvious payola / government corruption which ain’t what we’re talking about here.) Indeed, even the NYT piece that Kaus complained about didn’t say that tax cuts make people rich.
What a straw red herring: “Tax cuts don’t make people rich, you stupid liberals! Get over the tax cut thing.”
The reason that tax cuts for the rich is notable is not because we or the NYT editors “just vaguely assume that all economic inequality comes from tax cuts”. It’s because, yes, we should be “outraged that the ‘hyper-rich’ are getting tax cuts at all”. Why? Because a) the hyper-rich don’t need the friggin’ tax cuts; b) social services for the poor are hurting; and c) if the rich are getting richer it’s because of some sort of market failure, which a progressive tax system can help to remedy. Indeed, Kaus almost gets the problem in the market, although he may not see it as a problem:
When I looked at this question in the early 90s, the answer was pretty clear: the rich were growing richer due to changes in the underlying economy (e.g. greater rewards for skills) that affected their pretax income, not changes in the tax code that affected how much of that income they got to keep.
(emphasis in original)
Yes, Virginia, it’s changes in the “underlying economy”. Consider your example, the underlying economy providing “greater reward for skills”. Unpack that a little: Executive compensation packages have risen to enormous levels in this country, while working class wages have remained virtually stagnant. At the same time most of the basic living expenses which consume the majority of working & middle-class incomes (housing, healthcare, education) have increased while the cost of luxury goods really hasn’t. These basic living expenses are the ones which are amenable to subsidy by a government social safety net, a net which has been historically underfunded in this country and which continues to be simultaneously privatized (Social Security; higher & for that matter lower ed), plundered (Medicare prescription drug benefits & big Pharma), and impoverished (housing, healthcare generally, support for the unemployed & impoverished).
That’s what “greater reward for skills” in the “underlying economy” looks like, and it’s a good illustration of why tax policy has a role to play in dealing with these “underlying economy” issues. Kaus acknowledges that “Tax cuts at the top almost certainly ‘help’ widen the gap.” But although Kaus thinks the tax cut contribution is a tiny amount, he nevertheless thinks it’s important for the NYT series to talk even more about the tax cuts — “The interesting question is how much” — and suspects that they don’t because “they rightly fear the answer would be highly discouraging to liberals who don’t like rising income inequality, because it would indicate ‘progressive’ tax changes can’t hope to reverse that trend.” (emphasis in original.)
The NYT series is about class, but the NYT is hardly a radical social journal that’s going to lay out solutions that might involve fundamentally restructuring the economy or property rights. The whole tax cut thing is just the NYT taking the opportunity to get in a little dig & record-setting-straight on the Bush Administration’s lies about its tax cuts (a couple of years too late, I might add).
Kaus just doesn’t care about the tax cuts for the rich, and frankly doesn’t care if the rich get richer — indeed, a view held by many centrists as the NYT points out in its series.
But why make the rich even richer, Drum asks. That’s certainly not a good thing in itself. But it’s also not nearly as important a phenomenon as traditional liberals make it out to be. At some point, who cares if David Geffen has $1 billion or $4 billion–except Michael Eisner? He’s rich, OK? If our goal is (attainable) social equality rather than (unattainable) income equality–as I think it should be–there are more efficient, direct ways to achieve it than by raising Geffen’s taxes.
… and now officially straying from the topic:
Indeed there are more efficient, direct ways to achieve social equality (not counting Dr. Guillotin’s method) but for some reason Kaus linked that text to an LA Times article about the long-fought-battle for public access through portions of David Geffen’s beach estate to the beach. What’s a link typo? A linko? He must have meant to link this to “David Geffen” since it’s not so much an efficient means of achieving social equality as evidence of creepy beach surveillance:
Geffen had installed video security cameras that scanned the paved path off Pacific Coast Highway and every inch of beachfront in front of his house. The cameras were watching for “trespassers” stepping out of the public right of way and onto his private sand.
And “private sand” neatly brings us right back where we started from — huge freakin’ social inequality that has a lot to do with the current prevailing model of access to & control over resources — “property” — of which unequal income and tax breaks are just different manifestations. And neither the NYT’s series on class nor Mickey Kaus are aiming that deep.