How To Become Biden Roadkill

President Joe Biden just issued his raft of tax increases. Here’s the focus: the president wants to raise rates on the top earners across the board. Highest-earning individuals, investors, and corporations are all supposed to face much higher tax rates, under the administration’s budget plan. As a member of the opposition, given these proposals, how do you position yourself to get steamrolled unceremoniously?

First, you get scared. Above all you do not counter by advocating cutting tax rates at the top. Given that all evidence, since the 1980s, the 1960s, and the 1920s, shows that cutting top tax rates results in an upwards of 400 percent increase in tax revenues from the group directly affected, you have to balk at any suggestion of resisting top tax rate increases. Otherwise the electorate might detect that you see through demagoguery about raising top tax rates. How are you supposed to lose elections and your reputation, as an heir of Mellon, Kennedy, and Reagan, unless you submit?

Candidate Mitt Romney in 2012, as he tempered proposed tax rate cuts with caps at the top: “I will not, under any circumstances, reduce the share that’s being paid by the highest-income taxpayers.” Reduce the share? How about increase it magnificently by cutting the top-earner rate in particular?

Second, you temporize. You call on the example of President George W. Bush. You say you are for tax-rate cuts across the board, but in the event you concede to tiny impermanent cuts at the top, load up on family tax credits and sub-marginal rate cuts that surely must warm the hearts of the working class, and make the whole thing—especially the tiny rate cuts at the top—both phased in over a long while and then sunset-ed after a few years. Fakery over really cutting tax rates at the top brings a Great Recession, and you become a laughingstock on the basis of your economic record. A known socialist takes your place as president. Perfection in becoming roadkill.

Third, you get intimidated by spending. So Reagan won the debate, on any serious analysis, in cutting tax rates at the top. He took the personal ones down absurdly, from 70 to 50 to 28 percent. His successors Bush and Clinton split the difference of these top Reagan rates, 50 and 28, settling on something in the 30s. Budget deficit: annihilated by 1998. Growth: 4 percent per annum for six-year runs in both the 1980s and 1990s. Net new jobs 1980-2000: 38 million. Median household income: huge leaps. Federal Reserve after four straight years of federal budget surpluses in 2001: we are scared there is not going to be enough government debt for us to conduct open market operations.

Bail out, no chance of being roadkill by swimming in these conditions. You have to say that the spending boom of 2001-2023 has taken tax-rate cuts—especially at the top—off the table. Government spending has careened from 17 percent of GDP to nicely over 20 percent over this interval. Come to its heel. Let it predominate. Affirm that whatever the record of tax-rate cuts—especially at the top—the expenditure/debt matter by 2023 has become too grave. The debt is at $30 trillion. True, tax-rate cuts at the top generate a 400 percent increase in revenue from the highest group come heck or high water over a century. But the goal is to be roadkill.

Last, you let inequality have your way with you. You let it pummel you. You long to feel its punches. The richest cohorts separated hugely from everyone else come the 1980s, through till now. You make that an absolute issue. You suppress the knowledge that all jobs in this economy come from the top 1 percent’s deployment of their after-tax capital. You play ball with the idea that tax sheltering somehow goes down when the return to sheltering goes up with increases in top tax rates. You blow off the fact that inclusive of average state tax impositions, tax rates at the top are objectively immoderate at levels well over 40 percent and often above 50 percent, driving the rich’s capital far from productive use in service of the general prosperity.

These are the ways, tried and true, to have President Biden, he of the new tax-high-earner proposals, put marks on your back.

The electorate, inclusive of the ample millions of ordinary earners, fully understands that our enterprising rich are responsible for organizing the productivities of our economy. If you would like to be so un-populist as to not recognize this, a sure-fire way is to be reluctant to attack the president’s tax proposals for top earners with all your heart.

For theory, history, and data, please see our new book, Taxes Have Consequences, a history of the income tax and its effect on the economy.