How Bush Sent the Protesters to Wall Street
Though the Bush administration never admitted it, its tax cuts would almost certainly push the incomes of rich and poor further apart. As incomes became more widely dispersed, the gap in wealth between rich and poor would quickly grow as well. Even to a non-economist, the reason was easy to see: all the tax cuts were supposed to raise the return to saving- not just new saving, but existing saving, too - and the rich had much more saving than the poor.
After appraising the situation, you might decide to work a little less and spend more time managing your stock portfolio. Or, you might try to find ways for your employer to pay you in securities rather than in wages or salaries. Perhaps you'd buy special shares in your company that were only available to employees, and the shares would pay a divided in lieu ofsalary. All the income you received as dividends would be tax free, at least until the Internal Revenue Service caught on. Then you and your employer would have to find another loophole.
Tax lawyers, accountants, and financial planners would be glad to help you find that loophole. With the help of these professionals, huge chunks of income would start shifting way from taxed sources and into untaxed sources. As a result, the tax base would begin to shrink.
In this race to avoid the grabbing hand of the Internal Revenue Service, the wealthiest people would obviously have had a head start. They were already receiving a lot of income from dividends, interest payments andthe like, and they were also likely to be on first-name terms with atleast one financial advisor. The ones who would have the hardest timemaking the switch would be the working Americans who received most oftheir income from the sweat of their brow, or from the stain on the backof their swivel chair.
By the time these folks paid off their debts and started to save on a net basis, wealthier people would have been well on their way to entirely tax-free incomes, leaving the rest of working America to pay the taxes.The fortunate and growing minority who managed to receive all their income from stocks, bonds and other securities would pay nothing - not a dime -for America's cancer research, its international diplomacy, its military deterrent, the maintenance of the interstate highway system, the space program or almost anything else the federal government did. Broadly speaking, that fortunate minority would be free-riders.
How long would working Americans stand for this sort of thing? Probably not very long. The situation would recall the feudalism many of the first Americans were trying to get away from when they left Europe. It would take only a few more steps to return to medieval times, when the landowning aristocracy levied taxes on the poor peasants to pay for their wars.
I wrote the words above in 2003 for my first book, Neoconomy: George Bush's Revolutionary Gamble With America's Future (PublicAffairs, 2004).
Malcolm Gladwell teaches "Get over yourself and get to work" for Big Think Edge.
- Learn to recognize failure and know the big difference between panicking and choking.
- At Big Think Edge, Malcolm Gladwell teaches how to check your inner critic and get clear on what failure is.
- Subscribe to Big Think Edge before we launch on March 30 to get 20% off monthly and annual memberships.
Can sensitive coral reefs survive another human generation?
- Coral reefs may not be able to survive another human decade because of the environmental stress we have placed on them, says author David Wallace-Wells. He posits that without meaningful changes to policies, the trend of them dying out, even in light of recent advances, will continue.
- The World Wildlife Fund says that 60 percent of all vertebrate mammals have died since just 1970. On top of this, recent studies suggest that insect populations may have fallen by as much as 75 percent over the last few decades.
- If it were not for our oceans, the planet would probably be already several degrees warmer than it is today due to the emissions we've expelled into the atmosphere.
Yes, a coup d'état.
- Though we know today that his policies eventually ended the Great Depression, FDR's election was seen as disastrous by some.
- A group of wealthy bankers decided to take things into their own hands; they plotted a coup against FDR, hoping to install a fascist dictator in its stead.
- Ultimately, the coup was brought to light by General Smedley Butler and squashed before it could get off the ground.
Michael Dowling, Northwell Health's CEO, believes we're entering the age of smart medicine.
- The United States health care system has much room for improvement, and big tech may be laying the foundation for those improvements.
- Technological progress in medicine is coming from two fronts: medical technology and information technology.
- As information technology develops, patients will become active participants in their health care, and value-based care may become a reality.
SMARTER FASTER trademarks owned by The Big Think, Inc. All rights reserved.