Pre-Bush = Progressive?

It is appropriate for many to breathe a sigh of relief that Obama has set a 19 month timeframe with which to withdraw from Iraq, re-affirmed dedication to a re-strengthened NATO (I am glad to have been wrong), and vowed to fight the DC lobbyist machine. However, with much of Obama's seeming reversal of former President Bush's policies, it is very important to maintin a level of scrutiny of Obama's policies, both to keep him focused on the agenda of change that earned him the election, and it's simply due diligence - this is a democracy. This task is especially important considering many of his supporters in November are far more progressive than his actual campain promimses, i.e., once you look past his mantra of change.



Note: This is not intended to be the same stale rhetoric of partisan bickering by Republicans who suffer from selective memory.

In a recent blog post, Robert Reich announces that we finally have a progressive budget proposal. And I agree that this is a very significant shift in the priorities of the oval office. There are reasons to be pleased with the budget. As Reich put it, "it represents the biggest redistribution of income from the wealthy to the middle class and poor this nation has seen in more than forty years." It should also be pointed out that the projected 2010 deficit, proportionally speaking, will still be roughly 1/4 of what is was in 1944. Having said that, it also can't be ignored that Obama's proposed tax increase on the wealthy is really just a return to Pre-Bush 43 tax levels. The tax rate will return to 39.6% (35% now), and the capital gains tax (where the wealthy make their real money) will return to 20% (15% now). Now that may provide a silence inducing talking point whe debating one who thinks Obama is attacking the wealthy; but a return to Clintonite Neo-liberalism is not the change that should be expected.

A simple glance at the US Department of Treasury's website puts this into historical perspective. In 1913, only 1% of the US paid taxes - 1% of their income, with those who made over $500,000 paying seven times that amount- and that covered ALL sources of income. In 1916, the standard rate was doubled to 2%, and those who made $1.5 million or more paid 15%. To help pay for WWI, the tax on the wealthy in 1918 was 77% (and went back down to 25% when the economy improved in the 20s). During the Depression the top rate reached 79%, and by the end of WWII, those whose income exceeded $1 million paid 94% in taxes. Shockingly, even Reagan's tax cuts brought the top rate down to a whopping 50%, which was 11% higher than Obama's proposal. What this teaches us is that in the past the wealthy were expected to carry more of the tax burden; not because us common folk begrudge their wealth. Aside from it being a moral question, the way in which wealth is often obtained, the radidly growing wage gap, and the influence over the electoral and legislative process precluces anything but a greater tax burden on the wealthy - certainly greater than what is being proposed.