Obama has proposed his budget calling for higher taxes on the wealthy, and already the right (and some readers) have accused him of socialism.
Right now, the top 1 percent of wage earners take home 24 percent of the nation’s income. In 1976, that amount was 9 percent. During the Reagan presidency, it was somewhere around 12 percent. In fact, the only other year it has been 24 percent was in 1928, a pretty ominous year, I think.
Traditionally, we have kept this inequality down through higher marginal tax rates on the rich. Under Eisenhower, for example, those rates were over 90 percent, meaning that most of those big bonuses we read so much about would go to taxes. These days, however, the marginal tax rate peaks at 35 percent, so those bonuses get the same treatment as a middle-class salary.
The result is a huge disparity in wealth such as we have never seen. The United States is now more unequal that Venezuela and Argentina, banana republics that we used to rightly criticize. The result is absolutely un-American.
What Obama proposes – a reduction in tax breaks for millionaires – is a far cry from socialism (unless Eisenhower was an outright communist). What it really is – and what we should all be demanding – is a step toward normalcy.