Punish the Rich

Jamelle Bouie at The Washington Post explains why Democrats are adamant that we raise taxes on the rich. It's not because of the revenue such taxes would raise because there's not much revenue to be gained from it. It's because they simply want to punish the rich. Bouie doesn't use the word punish, but that's what his column implies.

Democrats, it seems, are prepared to drive the country deeper into recession, perpetrate a disaster upon the poor, and see our military eviscerated just so they can knock the rich down a couple of pegs and make themselves feel morally righteous by so-doing. But let Bouie tell it:

[A couple of days] from now, the United States will probably “go over” the “fiscal cliff,” and begin to implement a series of tax increases and spending cuts that will — over the course of the year — take a large bite out of economic growth. A deal to avoid the cliff is still possible, but unlikely; Republicans remain opposed to upper-income tax increases, regardless of size, and even if they come with cuts to entitlement spending.

On Monday, I wrote that this opposition is rooted in a fundamentally different view of how to create economic growth in a recession.

Republicans believe that federal spending is driving the debt that, in their view, is holding back the economy. Until Washington gets its “spending under control,” conservatives have all but promised to shoot down any tax increases.

It’s also worth looking at the other side. Yes, we know that Democrats view the current economic climate as demand-driven, but that doesn’t explain their insistence on upper-income tax hikes, despite the fact that — all things equal — it’s probably better to keep the tax cuts and wait for further economic growth before ending them.

The key thing to remember, however, is that Democrats — and liberals, in particular — care about economic inequality as much as they do growth. And as explained in The Post this morning, it’s this concern with inequality that has driven Democrats to rethink their approach on the Bush tax cuts.

Rhetoric aside, there’s no doubt Democrats know that — barring a hike to pre-Reagan levels — there’s not much revenue to gain from restoring upper-income taxes to Clinton-era levels. And when it comes to deficit reduction, full employment — and robust growth — is the best solution. If upper-income tax hikes serve a purpose, it’s to slow the income gains of the wealthiest Americans, who — for the past decade — have reaped the lion’s share of gains from economic growth.

I don't think it's unfair to note that there are two very influential groups among liberals. There are those who are rich and feel guilty about being rich, and there are those who are not rich and who envy and/or resent those who are. The combination of guilt and resentment is a combustible mix that's causing Democrats, particularly the president, to insist on measures that'll do nothing to cure our country's economic ills but do a lot to make them worse.