There’s a lot of (welcome) discussion about taxing the rich these days, but so far, there hasn’t been substantive talk about the structural problems that got our country to its current inequality crisis in the first place. I think this is an absolutely vital narrative to communicate to the American public, because if we want to create lasting, sustainable change, voters need to know just exactly where and why everything went wrong. I’m talking about fixing what Ronald Reagan broke.
Before Reagan entered the White House in 1981, there was a broad consensus among wealthy people that those who had been very fortunate had an obligation to the country that gave us the benefit of a good education, good infrastructure, and most of all stability. Then came the era of tax cuts removing the check on the greed that makes the system work.
Reagan’s tax cuts unleashed the greed in those in the higher income range. It was human nature. It didn’t happen overnight – such a profound and fundamental shifting of norms never does – but as the memory of the 65 and 75 percentile tax brackets faded, a sense of entitlement set in alongside a feeling of a sort of “manifest destiny” for the rich; that being rich was part of their DNA. That they were not just born right, but were genetically entitled to their vast sums of money like modern-day American royalty.
That sense of entitlement also gave rise to the notion that those less fortunate were lesser beings – if the rich had “worked hard” and were entitled to every penny as a result, then by default, those on the lower end of the income scale simply didn’t work hard enough. As the cash flowed upwards in society and the wealthy bent over backwards to morally justify it, a convoluted hierarchy began to take shape where American workers simply became pawns to push the wheel that made our businesses turn. They went from being an asset to a necessary expense.
We lost sight of the classic American ideal of the “ladder of opportunity,” and the rich “pulled away” from everyone else in the “income race”. Critical public services and programs that protected those less fortunate had their funding slashed. During that key period in the 1980s, we kicked out the ladder from beneath everyone else.
That is what Reagan broke, and that is what is sorely in need of fixing – the fabled American dream.
To fix it, we need Americans to believe that that dream is still within their reach for themselves and for their children, but that requires the wealthiest among us to return to the norm of broad, shared prosperity, and it requires structural change to encourage that. Going back to the pre-Reagan tax brackets renews our moral obligation to not just to those less fortunate, but to our country and the world in which we live.
That’s what this is all about: morality. Every religion in the world condemns excess wealth at the cost of those less fortunate, and the past 40 years have shown that the rich are no more immune to human failings like greed than the rest of humanity and will not act morally on our own. We use the extra wealth to buy things: another car, another yacht, another airplane, another house. The majority of jobs created by trickle-down were menial jobs to maintain these purchases: landscapers, maids, pool cleaners, deck hands, etc. who were treated with disdain and indignity.
It’s time we recognized the failure and flawed thinking of Reaganomics that gave rise to this inequity, and fix what he broke.