(Photo: Jim Legans, Jr; Edited: Jared Rodriguez / t r u t h o u t)
A return to Eisenhower-era, 90 percent top tax rates helps fix our economy in several ways:
1) It makes it take longer to end up with a fortune. In fact, it makes people build and earn a fortune instead of shooting for quick windfalls. This forces long-term thinking and planning instead of short-term scheming and scamming. If grabbing everything in sight and running doesn't pay off anymore, you have to change your strategy.
2) It gets rid of the quick-buck-scheme business model. Making people take a longer-term approach to building rather than grabbing a fortune will help reattach businesses to communities by reinforcing interdependence between businesses and their surrounding communities. When it takes owners and executives years to build up a fortune, they need solid companies that are around for a long time. This requires the surrounding public infrastructure of roads, schools, police, fire, courts etc. to be in good shape to provide long-term support for the enterprise. You also want your company to build a solid reputation for serving its customers rather than cheapening the product, pursuing quick-buck scams, cutting customer service etc. The current Wall Street/private equity business model of looting companies, leaving behind an empty shell, unemployed workers and a surrounding community in devastation will no longer be a viable business strategy.
3) It will lower the executive crime rate. Today, it is possible to run scams that let you pocket huge sums in a single year, and leave behind the mess you make for others to fix. A high top tax rate removes the incentive to lie, cheat and steal, to grab every buck you can as fast as you can. This reduces the temptation to be dishonest. If you aren't going to keep the whole dime, why risk doing the time? When excessive, massive paydays are possible, it opens the door to overwhelming greed and a resulting compromising of principles. Sort of the definition of the decades since Reagan, no?
4) Combined with badly-needed cuts in military spending - we spend more on military than all other countries on earth combined - taxing the wealthy ends budget deficits and starts paying off the massive Reagan/Bush debt. This reduces and ultimately eliminates the share of the budget that goes to pay interest. The United States now has to pay a huge share of its budget just to cover the interest on the borrowing that tax cuts made necessary. Paying off the debt would remove this huge drag on our economy. (Never mind that Alan Greenspan famously called for Bush's tax cuts by saying it was dangerous to pay off our debt - now that same Greenspan says we need to cut benefits to retired people because our debt is so high.)
5) It will bring in revenue to pay for improvements in infrastructure that then cause the economy to explode for the better. Investing in modern transit systems, smart grid, energy efficiency, fast internet, and other improvements lead to a huge payoff of increased prosperity for all of us - especially for those at the top income levels. Infrastructure improvement and maintenance is the "seed corn" of economic growth. We have been eating that seed corn since Reagan's tax cuts.
6) (Related.) It will bring in revenue for improving our schools, colleges and universities. Not only will this help our competitiveness, but it will improve each of our lives and levels of happiness.
