You don’t have to be a “leftist” or a socialist to support higher taxes for the very wealthy and obscenely rich, but the GOP remains steadfastly–even hysterically–opposed to proposals to tax those they misleadingly call “job creators.”
(Actually, jobs are created by increasing demand–if no one is buying your widgets, you aren’t going to hire more people to make more of them, which is why putting more money into the hands of the poorer folks who will spend it rather than hiding it in some tax haven, is what boosts employment. But I digress.)
A reader recently sent me a fascinating article about Washington State lawmaker’s decision to raise taxes on the state’s wealthiest residents.
The article began by quoting a 1933 Washington State lawmaker named Wesley Lloyd, who had proposed to “bring up the poor and bring down the rich into the class of the average man, where all may find real happiness and where we may know a widespread national prosperity.”
It then noted that–over the ensuing dozen years or so–FDR’s New Deal had caused “unprecedented progress” toward greater equality. One measure that helped achieve that equality was a 94 percent marginal tax rate on income over $200,000.
But Lloyd’s tax-the-rich spirit lives on, especially today in his home Washington State. Earlier this year, 19 of the state’s senators and 43 state reps introduced legislation that would fix a first-ever 1 percent annual tax on stocks, bonds, and other forms of “intangible personal property” worth over $250 million. The Evergreen State currently hosts over 700 grand fortunes that top this quarter-billion mark.
That legislation failed, but as the article noted,
that failure hasn’t left Washington’s deepest pockets feeling like celebrating. The reason? They’ve just become subject to another new tax, a measure that Seattle Times columnist Danny Westneat is describing as the state’s first-ever “wealth-related levy.”
The levy–a 7-percent tax on asset-sale profits over $250,000– has turned out to be a windfall for state coffers. Analysts had predicted that the tax would raise $440 million dollars. Instead, it has so far raised $849 million, almost double the take originally anticipated.
I hardly need point out that the mega-rich who paid a 7% tax on massive profits were hardly impoverished by them.
The Center for Budget and Policy Priorities–based in that other Washington–has been working to produce a package of tax reforms that would prioritize “equity and fairness; it has pointed to the experience of Washington State.
The Center is now hoping to nudge state lawmakers nationwide further in that direction with a new online tool for developing “State Revenue Options for Advancing Equity and Prosperity.” State policymakers, the Center notes, don’t always understand “how much revenue different policies might raise, whether a tax will fall more on families with low incomes or people at the top.” The new Center tool aims to build that understanding.
Understanding, of course, only takes lawmakers so far. They still have to overcome the opposition of the richest among us to paying anything close to their fair tax share. Lawmakers can certainly do that overcoming — if enough of us push them. And if we do enough of that pushing, maybe our lawmakers will start sounding like Wesley Lloyd back when he proposed to limit the personal wealth of our super richest.
“I do not seek to destroy wealth or industry,” Lloyd told his fellow members of Congress, “but I do propose to place the burden of public expense and national development upon the shoulders of those best able to bear that burden and those who have profited most. I would have the strong help the weak rather than have the weak forever carrying the strong.”
There are seemingly two fundamental questions that all American lawmakers confront: what should government do and how should government pay for doing it? We aren’t doing very well answering either question.
This blog–among many others–tends to focus on the first question, because so many of our current government policies are arguably counter-productive (or, in the case of our ongoing culture wars, insane). But the second question is inextricably entwined with the first, because the way we decide to pay for the decisions we make has an enormous effect upon how (and whether) those chosen policies work as intended.
Do we want the strong to help the weak? Or do we want to deepen the already massive divide between the haves and have-nots? Do we want to build and maintain a physical and social infrastructure that serves all citizens, or do we want to see only to the comfort and prosperity of the fortunate few?
Wesley Lloyd was asking the right questions, and Washington State is (slowly, incrementally) moving toward the right answers.