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The History/Significance of Reaganomics I, II, III, and IV
You might think the big difference between Democrats and Republicans is really about issues of gun control, abortion, health care, and other matters.
Ready for a wake up call on what the real bottom line difference is? One that affects whether or not we might even HAVE a country in the future?
Oddly enough, it’s as simple as this.....whether or not it makes sense to have a progressive income tax. Sound too simple? You bet it is. Unfortunately, that may be part of the reason why we’re losing the battle on this core issue.
We Democrats represent the only base of people that understand that taxes might go up or down depending on circumstances and the needs of the country. We also fundamentally understand that capitalism only works when it works for the people. This is a proven fact in history. What we also endorse is the use of a PROGRESSIVE tax system because it is fair and it allows capitalism to work for all the people, not just a small minority on top. History has shown that a progressive tax does not stifle the capitalistic system.
Capitalism without a progressive tax produces the statistical inevitability that MORE and MORE profits get concentrated to fewer and fewer people. The exact “adjustment point” for taxes levels or the “progressiveness” has never been historically established and it is obviously impossible to look at the argument in those terms. What does need to be completely embellished however, is that there is a core NEED for a progressive tax to be in place. Without it, we do quite literally fall into the “haves and have-nots” as Marx hypothesized.
The other side (and quite literally the enemy) are those in this country that seek to eliminate the progressive tax system. They are a hard core breed of Reaganites that have evolved and who have filtered through the political system.
Ironically, Reaganomics has evolved from something that might not have been all that bad an idea at the time to something which is quite out of control today. Actually, the original principles and advantages of the early theories of Reaganomics have long since passed. The new Reaganites in power have no more morals or business sense then a common criminal. They represent actually the worse Reaganites that could be in power now because they vehemently believe that the profits that they were given by Reagan were taken away by Clinton. They are completely motivated to get back those “lost profits”.
Consider this condensed view of “Reagonomics I, II, III, and IV” to put the evolution of Reaganomics into perspective:
“Reaganomics I” – (1980-1984) Previously, Kennedy had reduced the upper echelon tax rate from 90% to 70%. The American business community was maturing and this proved to be a timely and advantageous move. Enter Reagan. His move to reduce the upper rate from 70% to 50% and also loosen up other regulations was viewed quite positively by the business world and helped promote the small businessman. Although a growing movement in the business world was taking shape to give more emphasis on corporate profits for the shareholders, everything was going rather well (for the time being). An upper tax rate of 50% is comparable to many of the European countries and cannot in any stretch of the imagination be considered stifling to a capitalistic system. America was more or less in balance.
“Reaganomics II” – (1984-1992) Reagan’s clear intent of his second term was to knock the upper rate to unprecedented lows. The rate was thus lowered from 50% down to near 30%. This in combination with long term increases in defense spending and soaring debt resulted in Reaganomics first tipping the meter into the “capitalism overload” zone. Unfortunately too much of a good thing was music to the ears of the business world, and the momentum of profits for the sake of profits was fueled. Reaganomics became in this timeframe fully embellished and glorified by Limbaugh and others who had dreamed of an age of profit making that would allow a common rich man to achieve Rockefeller type wealth. Reaganomics thus became entrenched in the minds and hearts of a growing number of Reaganite Republicans that would now bring their power to bear on the American political system.
“Reaganomics III” – (1992 to 2000) This phase was an extremely important phase in which hard core Reaganites organized and mobilized to act out their ambitions through the political system. The common bond was between those that were literally shocked and emotionally torn by Clinton’s logical move to raise the upper rate just 8% to near 40% and bring our economic house back in order. While the economy and business world thrived and there was growing evidence that the 40% was NOT stifling at all to capitalism...."taking back money that had been given" was completely intolerable to these people. This growing movement of Reaganites vowed certainly to come back and get not only what they had “lost” during the Clinton years, but to notch up Reaganomics another dangerous step. During this phase the extremely important concept of “the government is stealing your money” was perfected. This was an important departure and considerably more insidious than Reagan’s original “you made it, you deserve to keep more of what you earn”. The flat tax was championed, and those radical right wing Reaganites that had no sense of history or sense of good for the country were about to organize and take back the White House.
“Reaganomics IV” – (2001 - ?) Reaganomics was one of the first items on the list of George W. Bush when he came to power as Clinton tax increases were immediately reversed. Goals to achieve as low as 28% and beyond, plus elimination of the inheritance tax, and potential move towards a flat tax emerged as if they were intended as a true knock out blow to Democrats. Moderate Republicans like John McCain who discussed the possibility that the rich who had profited immensely in previous years didn’t necessarily need new tax breaks were quickly shut down. What appeared over the preceding years as tongue and cheek rhetoric from a psychotic talk show host had actually come to fruition (and unfortunately owing to a very close election of course).
The most effective fixes I can recommend at this point are:
a. Bring the knowledge of the triumph of the progressive tax system into the political mix. Get the message to the point that it can be embellished by the common household. Whether it takes charts and pictures and simple math, the case must be made that we live in a capitalistic economy which generates an inordinate amount of wealth, and that that wealth doesn’t naturally “trickle down” to the bottom.
b. “Bring it on” – yes take the fight to them directly on this issue. Our key candidates must be willing to say, “They tell us we don’t believe in anything. Well we believe in a progressive tax system for this country and we have nothing to be ashamed for believing that. Belief in that system DOESN’T mean that we are stealing money from the rich. It is a fair system and IT WORKS. The other side has been attempting to sell the argument for years that it is unfair to take money in taxes and that this is stealing. That type of conditioning has been only for the purpose that they can exploit higher and higher profits for their own use”.
c. Neutralize the “class warfare” argument once and for all. Provide clear and ever repeated historic examples which show the rich have increasingly profited off the system while the middle class has seen only modest gains (and poor gap widening) while other services and infrastructure are suffering.
We do have a fundamental core difference, especially with regards to the extreme right wing Reaganites that are now in power, and it’s time to really start thinking about making and perfecting the argument before we lose the fight and the country with it.
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