By Rep. Andre Carson (D-Indiana) and Patriotic Millionaire Jeff Smulyan on IndyStar
Chances are, you have complained about taxes at some point. No matter who you are, they are complicated, time consuming, stressful and often costly. Looking at our overly complex tax code, it is clear the United States is in need of a new system. Recently, President Donald Trump, Speaker Paul Ryan and Senate Majority Leader Mitch McConnell became the latest in a long line of leaders who have promised major tax reform, this time before the end of the year. This sounds fantastic in theory, especially since our current system has not been reformed since 1986. However, we are concerned that a partisan attempt at tax reform will ignore the persistent problem of economic inequality. Any tax “reform” that ignores or contributes to the ever-growing gap between the wealthy and the rest of the country should be a non-starter.
The best way to understand this issue is by looking at a simple set of facts. Every day, men and women like you go to work, at jobs or building businesses. Your hard work and hard-earned pay not only help you make ends meet but also support local businesses, growing our national and local economy in the process. Between 1935 and 1980, 30% of all economic growth ended up in the pockets of the wealthiest 10% of Americans. To some, this may seem shockingly high. Yet even more shocking is that this number has increased to 100% since 1980. In fact, this gain has gone almost entirely to the top one half of one percent, the richest of the rich in our country. Over the last 35 years, millionaires and billionaires have never done better, while average Americans have seen no sign of an end to their struggles.
If we approach tax reform as one more way to provide disproportionate benefits to the wealthiest Americans, we will be continuing a process that has ripped apart the foundations of our society. When 90% of Americans have not enjoyed any benefits from our growing economy in the last 35 years, tax reform that doesn’t recognize their plight is a refusal to face reality.
One of us, as the CEO of a large company, has been very fortunate to spend most of his career in the top 1%. However, we both realize that if the deck continues to be stacked in favor of the wealthy, our economy and our national stability will be endangered.
Putting money in the hands of the rest of our country isn’t “class warfare” or income redistribution, it’s merely common sense. More disposable income for the middle class will invigorate our economy. Consumer spending accounts for 70% of our gross domestic product. If you have more money in your pocket, you spend more in our community, and you grow our economy.
The wealthy have always been able to do well in this country, and at no period in our history have they done as well as the last 35 years. In World War II, top earners paid a tax rate of 94%, and stayed above 90% during the Eisenhower Presidency. During that war, America’s wealthiest citizens believed (however grudgingly) that it was their duty to sacrifice for the good of the nation. No one is suggesting top rates of 90% or even 50%, but it is clear that our most successful need to think about sacrificing a bit more for the good of our country. Now is not the time to cut their taxes again.
We’ve tried trickle-down economics, and the results have been clear for years — it doesn’t work. Despite politically charged rhetoric, there is no evidence that tax cuts guarantee investment in jobs or even spending in the U.S. economy. The only assurance we have is that tax cuts for the rich lead to the rich having more money. Instead of giving tax cuts to millionaires and billionaires, we should be focused on building a thriving, robust economy that gives all Hoosiers, not just a wealthy few, the chance to succeed. There are hundreds of thousands of Hoosier families barely scraping by, and if anyone needs help, it’s them. How can anyone look at the struggling poor and middle class with a straight face and tell them that, at a time when the rich have never done better, we need to cut taxes for millionaires and billionaires?
And it’s important that wealthy Hoosiers pay their fair share. Whether we like to admit it or not, we wouldn’t have made it to where we are today without the help of government programs. Whether it was public schools, medicine or technology created by taxpayer-funded research, or even just the roads we drive on and the water we drink, we all succeeded in part because of what the government provided for us. Now that we’ve “made it,” it’s our responsibility to pay it forward and make sure every child has the same opportunity we did growing up.
Our legislators, the men and women who represent Indiana in the US House and Senate, should not give one penny of tax cuts to the wealthy while a single Hoosier family suffers. Let’s focus less on giving millionaires and billionaires another handout, and more on giving struggling families the help they need to find good jobs, affordable housing, and a quality of life that would make every Hoosier proud.
Rep. Andre Carson
founder and CEO, Emmis Communications