The rage of the rich (Krugman)

Paul Krugman writes yesterday that the angriest people these days aren't the Tea Partiers, they are the wealthy one percent facing the prospect of higher taxes. It's the kind of anger that led one fund manager to compare Obama's proposal to close a tax loophole that benefits the mega-rich to Hitler's invasion of Poland. Krugman goes on to point out that those arguing against allowing the Bush-era tax cuts to expire aren't even trying to argue this will benefit the economy as a whole.

Tax-cut advocates used to pretend that they were mainly concerned about helping typical American families. Even tax breaks for the rich were justified in terms of trickle-down economics, the claim that lower taxes at the top would make the economy stronger for everyone.

These days, however, tax-cutters are hardly even trying to make the trickle-down case. Yes, Republicans are pushing the line that raising taxes at the top would hurt small businesses, but their hearts don’t really seem in it. Instead, it has become common to hear vehement denials that people making $400,000 or $500,000 a year are rich. I mean, look at the expenses of people in that income class — the property taxes they have to pay on their expensive houses, the cost of sending their kids to elite private schools, and so on. Why, they can barely make ends meet.

And among the undeniably rich, a belligerent sense of entitlement has taken hold: it’s their money, and they have the right to keep it. “Taxes are what we pay for civilized society,” said Oliver Wendell Holmes — but that was a long time ago.

The spectacle of high-income Americans, the world’s luckiest people, wallowing in self-pity and self-righteousness would be funny, except for one thing: they may well get their way. Never mind the $700 billion price tag for extending the high-end tax breaks: virtually all Republicans and some Democrats are rushing to the aid of the oppressed affluent.

You see, the rich are different from you and me: they have more influence. It’s partly a matter of campaign contributions, but it’s also a matter of social pressure, since politicians spend a lot of time hanging out with the wealthy. So when the rich face the prospect of paying an extra 3 or 4 percent of their income in taxes, politicians feel their pain — feel it much more acutely, it’s clear, than they feel the pain of families who are losing their jobs, their houses, and their hopes.

And when the tax fight is over, one way or another, you can be sure that the people currently defending the incomes of the elite will go back to demanding cuts in Social Security and aid to the unemployed. America must make hard choices, they’ll say; we all have to be willing to make sacrifices.

But when they say “we,” they mean “you.” Sacrifice is for the little people.

Indeed! Believe it or not I used to be a cheerleader for what was called back in my youth -- Reaganomics -- or "trickle-down economics" by its detractors. I read Hayek and Friedman and flirted with becoming a Libertarian. No more. Now that I've lived a decade or so in the real world I don't buy the argument that cutting Rush Limbaugh's taxes is somehow going to make it better for the rest of us, or that raising Rush's taxes is an intolerable affront to his individual liberty which will soon send us all down the slippery slope to serfdom. My Grandpa Ed Ley (rest his soul) a lifelong working-class Democrat would have told me such if I'd have listened. The older I get the more I realize Grandpa was right about a lot of things.