I wrote a post down below (A Tax Primer) that elicited response from a couple of conservatives, and could well have led to one of those tit-for-tat exchanges that covers all the details in great detail while missing the point entirely. But I wasn’t in the mood. I wrote about how people of ordinary means are taxed at a higher level than people of extraordinary means, and how this is going on right under our noses. The gist of the response is that investors are performing a function too important to tax at regular levels, about how wealth creation is too important to mess with, etc. There’s even a reference to Cuba in one of the responses. That’s another form of Godwin’s Law, I think (any discussion of economics will eventually devolve into accusations of communism).

Yet they miss the basic point: The flow of wealth is upward. Investors don’t create wealth – they harvest it, reallocate it, store it for themselves in the form of second homes and fat bank accounts. They perform a useful function, but not so vital that we need to give them special tax treatment. We’ve had periods when taxes on upper income levels were very high, in the fifties, sixties, and seventies, growth rates were high, prosperity was more widely spread, there was less inequality. Life was generally getting better for most people.

The supply-siders have had their way now since 1980, and more so since 2000. Since George W. Bush has become president, five million people have slipped into poverty, eight million have lost their health insurance, median household income has gone down thirteen hundred dollars, three million manufacturing jobs have been lost, three million Americans have lost their pensions, home foreclosures are now the highest on record since the Great Depression, the personal savings rate is below zero (which hasn’t happened since the Great Depression), real earnings of college graduates have dropped five percent, entry level wages have fallen over three percent, wages and salaries are now the lowest percentage of GDP since 1929.

That’s during a period of low taxation of wealth. The underlying principle is that the wealthy are the means by which we accumulate wealth for investment, yet in prior times there was plenty to invest, even with high marginal rates. It sounds very reasonable, but doesn’t play out in the real world.

There’s class warfare going on, but it is not as normally pictured – it’s not the rabble pounding on the doors of the mansions – quite the opposite. The wealthy are slowly bleeding the wealth creators, the workers, investors, small business owners, and hoarding that wealth. Lately, they have taken to encouraging people to use their homes as credit cards, and have so managed to tap the last great source of middle class wealth – home equity. We have seen an enormous transfer of wealth these past thirty years, upward.

I am an ordinary person of modest means. My marginal rate is 46%. It’s no accident. I’m not politically powerful, I don’t have a lobbyist working for me, or a tax foundation to intellectualize the theft. Wealthy people have now rewritten the tax code so that their type of income is taxed at a maximum rate of 15%. That’s not a reflection of economic need, nor does it serve the greater good. It merely reflects who has power, who doesn’t.

Taxation is both a means of raising revenue and a tool by which we increase equality. Progressive taxation is well-established and widely practiced, and we are no less free because of it. We simply have more equality in society, a larger middle class, and more opportunity for people to achieve better lives. And taxation itself, which the right wing presumes to be an economic sin, often enough lead to wiser use of money for public good. There’s little difference between public and private spending other than money used to build a bridge or school offers greater benefit to more people than yachts, mansions and casinos.

We once had marginal tax rates that hit as high as 70% on the equivalent of $3 million in income, inflation adjusted. We also had growth widespread prosperity, and an expanding middle class. Progressive taxation did not hurt us – in terms of all of us, greater good, with was a public benefit.

Conservatives are fundamentally wrong about the way the world works. They are poster children for the power of an ideology crafted by the wealthy in order to justify wealth accumulation as the be-all-end-all, as if it were the only meaningful form of freedom. They have given us what we have now – a broken economy and widespread poverty, wide divisions of wealth ownership and people kept afloat by borrowing because wages failed to keep up with productivity. The fruit of our labor percolated up – nothing has trickled down.

Friday, October 31 Wall Street Journal, page one: Banks Owe Billions to Executives. They’ve had a bailout, but companies like Goldman Sachs are contractually obligated to pay billions to the very executives who drove them into a ditch. In the end, taxpayers will foot the bill.

That’s how our economy works, in microcosm. In this election Barack Obama has made a small gesture to undo some of the injustice – a middle class tax cut. It’s a smart thing – it puts money in the hands of people who need it and actually spend it, and we’ll all do well by it. But listen to the right wing – “Socialism!”, as if sucking off the wealth of the middle classes for accumulation above is somehow more worthy. He wants to take a (very) small step back towards progressivity. I hope he wins, I hope he succeeds. We’ll all be better off.

Black/White thinkers cannot brook ambiguity or tolerate divergent views on complex topics. This Washington Post editorial is worth quoting in full.

An ‘Idiot Wind’
John McCain’s latest attempt to link Barack Obama to extremism
Friday, October 31, 2008

WITH THE presidential campaign clock ticking down, Sen. John McCain has suddenly discovered a new boogeyman to link to Sen. Barack Obama: a sometimes controversial but widely respected Middle East scholar named Rashid Khalidi. In the past couple of days, Mr. McCain and his running mate, Gov. Sarah Palin, have likened Mr. Khalidi, the director of a Middle East institute at Columbia University, to neo-Nazis; called him “a PLO spokesman”; and suggested that the Los Angeles Times is hiding something sinister by refusing to release a videotape of a 2003 dinner in honor of Mr. Khalidi at which Mr. Obama spoke. Mr. McCain even threw former Weatherman Bill Ayers into the mix, suggesting that the tape might reveal that Mr. Ayers — a terrorist-turned-professor who also has been an Obama acquaintance — was at the dinner.

For the record, Mr. Khalidi is an American born in New York who graduated from Yale a couple of years after George W. Bush. For much of his long academic career, he taught at the University of Chicago, where he and his wife became friends with Barack and Michelle Obama. In the early 1990s, he worked as an adviser to the Palestinian delegation at peace talks in Madrid and Washington sponsored by the first Bush administration. We don’t agree with a lot of what Mr. Khalidi has had to say about the Israeli-Palestinian conflict over the years, and Mr. Obama has made clear that he doesn’t, either. But to compare the professor to neo-Nazis — or even to Mr. Ayers — is a vile smear.

Perhaps unsurprising for a member of academia, Mr. Khalidi holds complex views. In an article published this year in the Nation magazine, he scathingly denounced Israeli practices in the West Bank and Gaza Strip and U.S. Middle East policy but also condemned Palestinians for failing to embrace a nonviolent strategy. He said that the two-state solution favored by the Bush administration (and Mr. Obama) was “deeply flawed” but conceded there were also “flaws in the alternatives.” Listening to Mr. Khalidi can be challenging — as Mr. Obama put it in the dinner toast recorded on the 2003 tape and reported by the Times in a detailed account of the event last April, he “offers constant reminders to me of my own blind spots and my own biases.”

It’s fair to question why Mr. Obama felt as comfortable as he apparently did during his Chicago days in the company of men whose views diverge sharply from what the presidential candidate espouses. Our sense is that Mr. Obama is a man of considerable intellectual curiosity who can hear out a smart, if militant, advocate for the Palestinians without compromising his own position. To suggest, as Mr. McCain has, that there is something reprehensible about associating with Mr. Khalidi is itself condemnable — especially during a campaign in which Arab ancestry has been the subject of insults. To further argue that the Times, which obtained the tape from a source in exchange for a promise not to publicly release it, is trying to hide something is simply ludicrous, as Mr. McCain surely knows.

Which reminds us: We did ask Mr. Khalidi whether he wanted to respond to the campaign charges against him. He answered, via e-mail, that “I will stick to my policy of letting this idiot wind blow over.” That’s good advice for anyone still listening to the McCain campaign’s increasingly reckless ad hominem attacks. Sadly, that wind is likely to keep blowing for four more days.

I got robocalled last night – some guy talking about Obama’s ‘clinging to guns and religion’ comment. McCain is reduced to cheap shots and smears, and when a state comes into play, floods it with calls. That call told me that Montana is in play. Or maybe it’s just insurance. Who knows with that campaign.

Here’s what Obama said way back when:

“And it’s not surprising then they get bitter, they cling to guns or religion or antipathy to people who aren’t like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations.”

There’s a problem with that statement: It’s true. In politics, that’s a no-no.

In a year when no holds are barred, when there is no low to which people will not stoop, I thought this was low. Despicable.

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Hagen had a good response. I hope there’s a backlash.

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I am self-employed and I live in Montana. I make a modest income, enough to qualify me as “middle class”. My marginal tax rates are as follows: Federal income, 25%, Federal self-employment (FICA), 14.2%, Montana income tax, 6.9%. My marginal tax rate is 46.1%.

Contrast that with someone who lives on inherited wealth or on passive income, such as dividends and capital gains: Marginal tax rates: Federal rate, 15%, Montana rate either 5.9% or 6.9%. Marginal tax rate, either 22.9% or 23.9%.

Those special investor tax rates applies to all income, no matter how high – into the millions. The marginal tax rates that apply to me apply to me and all workers whose taxable income starts at $44,000 and extends to $113,000. The rates only go up from there. Working stiffs are getting taxed at more than twice the rate that investors and trust babies are.

When pundits now tell us that a third of American pay no tax at all, they are talking about the income tax, and not the payroll (FICA) tax. All working Americans pay the FICA or self-employment tax (two names for the same animal) at 14.2% of earnings with no deductions or exemptions allowed. Many poorer workers get an earned income credit that refunds some or all of this tax. Poorer workers with children get a true subsidy via the EIC. Those are the only one who pay no tax, and it is nowhere near a third of us.

Obviously I have oversimplified, not taking into consideration deductions or exemptions. I paint with a somewhat broad brush, but even with those things factored in, the bottom line is that working middle class Americans pay tax at very high rates, often double what investors pay.

Obama would raise the top federal marginal rate from 35% to 39%, where it was prior to Bush taking office. He would eliminate the special break that investors get on dividends and capital gains. That would take us back to where we were in 2000. He would ease the burden slightly on the middle class.

The right wing is screaming now ( in unison, of course), that Obama is a “socialist” for wanting to offer middle class Americans a tax break while restoring the top rates to the pre-Bush levels. It’s doesn’t take a lot of research here to see what their real agenda is, and who they really work for.

For those Americans who think that an Obama presidency is a threat to the middle class, pay attention! A vote for John McCain is a vote against your own economic interest.

In his 1992 Senate bid, McCain was joined on the campaign trail by his wife, Cindy. … At one point, Cindy playfully twirled McCain’s hair and said ‘You’re getting a little thin up there.’ McCain’s face reddened, and he responded, ‘At least I don’t plaster on the makeup like a trollop, you c—.’

This article, Head of State, comes from an unexpected source – the October 20 issue of The American Conservative. The thrust of the article is that John McCain could possibly be a victim of Traumatic Brain Injury (TBI), and Post-Traumatic Stress Disorder (PTSD). The author, Jim Pittaway, is a licensed psychotherapist (practicing in Missoula) who has worked for a decade in a multidisciplinary rehabilitation program for victims of TBI.

I have a hard time in my mind casting John McCain as a victim. Indeed he acted in service to his country when he bombed the North Vietnamese, but said service was disreputable. We were a technologically superior society unleashing the totality of our killing machine on an agrarian country. John McCain was shot down while under cover of official duty, but his actions are rightly seen as crimes when stripped of the official cover of military necessity. He was captured, imprisoned, and, if he is telling us the truth, tortured. The torture was of a low-tech variety, where he was beaten and repeatedly went in to states of unconsciousness, only to be revived and beaten again. It was truly inhuman – what he did, and what was done to him.

Pittaway maintains that an individual cannot undergo such trauma without long-lasting effects, and that McCain has never been treated for these effects – is in fact in denial that such treatment could have affected him at all. As a result, he is a walking bomb, and man who Phoenix mayor Paul Johnson says is “in the area of being unstable.”

Pittaway says “He is always angry at someone, or he is looking for something to be angry about.” He should be consigned to blogging, and leave public office to the more stable types.

Interesting background on the effects of blunt head trauma on international affairs:

So, those games we used to play as a kid, where my brothers would put a bucket over my head and hit it with a baseball bat – those games were not so innocent after all. I should have known.

In the Tudor case of Henry VIII, we have an individual whose life has been chronicled in such tedious detail that we can identify with specificity what clinicians call “precipitating events.” We know that, in addition to any damage done in training, he was unhorsed in a tournament trying to impress Anne Boleyn. This left him unconscious, probably in a coma, for several days, as did another fall from a horse while riding in the country, shortly before he had Boleyn beheaded. Although this man was afflicted by numerous ailments, a recent publication by the Congress of Neurological Surgeons maintains that his remarkable cognitive and emotional degeneration was substantially due to progressively more severe organic brain damage incurred during the course of his violent life.

George W. Bush presents as a shallow man, incurious and seemingly indifferent to the suffering of others. He undertook impulsive actions with dire long-term consequences. He didn’t realize the fury of the force he was unleashing – he didn’t think it through. (But Cheney did – that is more worrisome.) He’s a lesson in why the guy you want to have a beer with is not necessarily the guy you want to be president.

McCain is something worse, if that is possible – a man who knows first-hand that war is hell, who suffers from “unregulated anger, impulsivity, inability to tolerate ambiguity”. Who is more dangerous? Hopefully, we won’t have to find out.

The McCain campaign has set its sights on Pennsylvania, even though they trail wildly in the polls there. To them, it’s a turnkey state.

I’ve heard Pennslyvania described as “Pittsburgh in the west, Philadelphia in the east, and Alabama in between. As John Murtha regrettably noted, parts of the in-between are “redneck” and “racist”.

So when Hillary campaigned in that state, she sacrificed Geraldine Ferraro up, having her make some racist comments about Obama, and then resign her post. The comments were most assuredly aimed at the in-between area.

So I’m a little bit curious about Ashley Todd’s venture into infamy this week – her claims that she was attacked by a six-foot-four black man who carved a ‘B’ on her face. It’s the kind of thing that would play well to racist sentiments. When it happened, the McCain people were all over it, beating the police to the media. And it turns out that Todd is a McCain volunteer.

Politics can be seamy. Obviously this is only speculation, but the Todd incident struck me as timely, and as something that would have dovetailed nicely with McCain’s efforts to pull Pennsylvania out of the Obama column.

Addendum: Well, I’m not the only curious one. According to this Raw Story item, the McCain people knew far too much about this attack far too soon.

Addendum: Read what Josh Marshall has to say.

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Most people are religious to some degree or another, but also have their heads planted in the real world. Religion is mostly something we inherit from our parents who inherited it from their parents … on and on. Religious icons are usually mother/father substitutes, and they offer great comfort to people in dealing with the inevitable pain and trouble and suffering that is part of life. So be it.

But there’s a portion of the population for whom religion is a club – a way of expressing their desire to control the behavior of other people, a way to self-justify while demonizing people who disagree with them. They are called fundamentalists, evangelicals, and other names. I’ve wondered for some time if there is some mental derangement that underlies such destructive belief systems.

Listen to Crazy Tracy – she’s only letting us in for a brief glimpse at her soul. She’s only telling us a little bit. But it’s enough. Barack Obama is not just a man with a world view – he’s some incarnation of evil, likely the devil, certainly Muslim. Tracy has a fire burning in her, a desire to see Obama punished, and likewise to all of us evil enough to support him. She’s not all there.

There are a lot like her. America is off-the-charts fundamentalist, a lot like Iran in that regard. Jimmy Carter was the first president in my lifetime who tapped the electoral potential of the Christian Right – he used them to some degree of success in his run in 1976. But the Republicans spotted the enormous potential for these people, who as a voting bloc tend to go all in or all out. From 1980 forward, the Republicans used the abortion issue enlist the Christian Right to their cause. Since that time, they have become an essential part of the party’s base.

The question is, of course, how much power they really have. The Republicans have skillfully managed them, taking their support and giving them little in return. But they are getting bolder, demanding more. Bush tossed them the Office of Faith Based Initiatives, and a couple of Supreme Court judges who may (or may not) overturn Roe v Wade. But the primary thrust of the Republicans has been far from religious – they are the party of top-down economics, and their art is to get people to vote against their own self-interest. The Christians have been an essential force in that effort, even as they fail to understand what it has done to them and all of us.

All things in moderation. A little religion is good, I suppose. A lot can be, and has been, very bad for us.

Footnote: If Roe v Wade is overturned, will the Christian Right recede again into the shadows? Will Republicans keep the issue alive?

This is an interesting letter written in response to a Glenn Greenwald piece called “Another Myth Fallen: Obama’s “Jewish Problem”. Seems Palin’s negatives are not just skin deep. She has cost him an entire constituency.

My Jewish Spouse…

…had been worried about the elderly Jews in Florida. A lot of them were looking to support McCain in this election due to the fact that Obama has a Muslim middle name, Obama is black and McCain is believed to be more pro-Israel.

But a few weeks after Palin, that worry was gone. “There’s no way they’ll vote for McCain now. They realize who Palin is. Their kids and grandkids won’t let them vote for McCain. Their kids will make them watch youtube” (This was said before Sarah Silverman’s “Great Schlepp”).

The youtube videos of Palin in her church were all over the net. Palin talking about “how great it was gettin’ saved,” Palin getting a blessing from one of her pastors who asked God to watch over Palin as she is the governor of Alaska, a “refuge state” for the “lower 48” in the End Days. There was no mistaking his message – End Days are near and Alaska will be a “refuge” state not just because of its geographic location, but because of all the evangelicals who live there and who have prepped for the Rapture. And let’s not forget Palin’s evangelical witch doctor.

Then there’s Palin saying that creationism should be taught along with Darwin’s Theory of Evolution in science classes. Yeah, that’s what retired Jews in Miami want their grandchildren learning in public school, right? That creationism is valid scientific theory?

Palin constantly extols the unsullied virtues of smalltown America while insulting community activists and slick urban types. Smalltown America, says Palin, is the “real” America. Yeah, and how many older Jews come from small American towns? Very few. Most of those who retired to Florida are either urbanites who helped found the suburbs after WWII, or they are the first generation who grew up in postwar suburbs. They know what Palin means when she talks of “smalltown values” in the “real America.” She means white Christians. Not blacks. Not Latinos. Not recent immigrants. And not Jews. Especially those lib’rul Jews who run Hollywood and the banks and who were born and raised in Brooklyn and made sure their kids went to college – especially those “elite” colleges where the lib’rul Jews seem to make up the entire faculty!

So how does McCain look to them after the selection of Palin? Like a loser. An asinine, pandering loser whose ambition to be president overrides any sense of decency. Sure, there are diehard McCain fans among the retired Jewish folks in Florida who will vote for him. There has always been a high regard for McCain (especially among WWII and Korean War veterans, a surprising number of whom are still alive and voting) because of his POW history and because he seemed like someone who was not as partisan as his fellow partymates. But respecting McCain’s service to his country does not outweigh all of McCain’s negatives now. Especially his biggest negative — his smalltown, evangelical, xenophobic, intellectually lazy, uninformed, anti-science running mate who came out swinging at the GOP convention, snidely insulting anyone who doesn’t share her background and beliefs.

Good work, McCain. Nice way to alienate the older Jewish vote. I thank you for that.

I awoke this morning to a front page article in our little right wing daily paper here highlighting an AP poll that found that John McCain had narrowed the gap, and that Obama’s lead was only one point, 44-43%. This, said the article, is a result of the third debate and the success of the “Joe the Plumber” talk.

Right away I went to RealClearPolitics, where I follow the polls, to see if the others had noticed the same closing. But no change – Obama by anywhere from 6-12 points. So I judged the AP poll to be an outlier. We’ll see.

However, here is some of the details behind the AP poll (thanks to Americablog.com): They weighted their respondents so that 45% of them were born again/evangelicals. However, in 2004, the evangelicals made up only 23% of the voters, scary enough in itself, but that’s another story. By adding an additional 22% of them to the sample for their poll, AP heavily skewed it in favor of McCain.

Incidentally, there are eight national polls at work, and seven of them show Obama with a large lead. Our Chronicle chooses to run a front page story on the one that doesn’t. Right wingy dingy anyone?