Disco-dancing toward the Fiscal Cliff
California’s Asian Americans seem in synch with an approach that would tax the wealthy. A new post-election poll this week showed that 65 percent of Asian American voters supported an initiative that would raise taxes on those over $250,000 in income to fund public education. Another 76 percent supported increasing the state’s income tax on the rich.
The poll suggests Asian Americans would be supportive of the President’s effort in the current fiscal cliff debate.
But to me, it all became clear when I heard Sir Monti Rock III on my satellite radio this week.
You’ll recall Sir Monti, the leader of Disco-Tex and his Sex-O-Lettes. As I listened to their 1975 hit “Get Dancing,” it dawned on me that disco could be the answer to move our wonky Washington budgeteers to compromise.
You remember the ’70s, when the top marginal tax rates were anywhere from 50 to 70 percent on incomes over $200,000.
It made me laugh when I saw the Wall Street Journal herald that President Obama was signaling to Republican leaders some flexibility before hitting Clinton era rates in the deficit reduction deal. But is it really a stretch going from 35 percent to 39.6, where the tax rates were in the ’90s?
Those were the relatively good old days when stimulus packages were stimulus packages, and America worked its way back to economic health. If Republicans are balking at 39.6 to get to real compromise, maybe they should go back a little further and think of the ’70s and all the taxes Sir Monti must have paid (though the Sex-O-Lettes may have provided him a nice deduction).
Can you imagine John Boehner in the ’70s, when he was in his 20s, perhaps garbed in a polyester shirt bathing in the light of a mirrored disco ball?
I would pay taxes to see that picture.
Seems to me that to get to a decent compromise, the debaters need to get in the mood. After all, compromising times call for compromising music. Maybe they can pipe some different music into the Capitol to get people in the spirit? Disco could help bring the debate into focus. Compared to the tax rates of the ’70s, can 39.6 percent be all that bad?
Of course, there’s a slight catch to the fight on high tax rates. What the tax rates are for the rich may not matter all that much anyway.
As Robert Reich wrote in his blog:
Higher taxes on the rich won’t slow the economy because the rich will keep spending anyway. After all, being rich means spending whatever you want to spend. By the same token, higher taxes won’t reduce their incentive to save and invest because they’re already doing as much saving and investing as they want. Remember: they’re taking home a near record share of the nation’s total income and have a record share of total wealth.
Instead of tax rates, we need to concentrate on the kind of stimulus that delivered us from the pain of the ’90s under the Clinton era. Job growth, government spending, and tax cuts for the middle class. That’s where it’s at. Higher tax rates on the wealthy? As Reich points out, it’s kind of moot.
And that really should make the fiscal cliff debate a whole lot easier.
President Obama may not sing Al Green to John Boehner, as he did to Michelle. But Disco-Tex? I can see it.