It’s pretty simple. In the past, if you had an extreme point of view, it was unlikely that you were going to come in contact with someone who had that same point of view. You were isolated. Now, the extreme people can find each other on the Web and reinforce their views.
90% income tax rates is not a mainstream view. But because of Bernie, and because of the Internet, a lot of people share it. Bernie won’t be the nominee, and he’ll be too old in 2020, but I bet you that we get someone even more extreme than Bernie in 2020. And I bet the Republicans will have a candidate who is even more extreme than Trump. Because the trend toward polarization is relentless.
Any candidate who got up and extolled the virtues of moderation would be laughed off the stage.
So going back to the infographic, polarization is bad for the economy. And polarization is relentless. It doesn’t look good.
Speaking of failed candidates, let’s take a look at Jeb Bush’s proposed tax plan (now irrelevant) from taxfoundation.org:
• Consolidates the current 7 tax brackets into three, with a top marginal income tax rate of 28 percent.
• Taxes long-term capital gains and qualified dividends at a top marginal rate of 20 percent.
• Increases the standard deduction from $6,300 to $11,300 for single filers, from $12,600 to $22,600 for married joint filers, and from $9,250 to $16,750 for heads of household. The personal exemption would remain at $4,000.
• Eliminates the personal exemption phase-out (PEP) and the Pease limitation on itemized deductions.
• Eliminates the state and local income tax deduction.
• Caps all remaining itemized deductions except for the charitable deduction at 2 percent of adjusted gross income (AGI).
• Eliminates the Alternative Minimum Tax.
• Eliminates the Net Investment Income Tax of 3.8 percent, which was passed as part of the Affordable Care Act.
• Doubles the Earned Income Tax Credit (EITC) for childless filers.
• Allows second earners to file their tax returns separately.
• Exempts taxpayers over the age of 67 from the employee-side payroll tax.
• Taxes carried interest at ordinary income tax rates instead of capital gains and dividends tax rates.
• Eliminates the Estate Tax and ends stepped-up basis in capital gains for estates currently liable for the estate tax.
• Taxes all interest income at the lower capital gains and dividend tax rates.
This is what I would call an eminently reasonable tax plan. Some things, like increasing the standard deduction, doubling the EITC, and doing away with the carried interest provision are unpalatable to me. But it is reasonable.
As much as I would like a flat tax of 10%, it is not reasonable. 90% taxes are not reasonable. I agree with Ted Cruz that you should send your taxes in on a postcard. That’s nice. Not going to happen.
I will tell you my college yearbook quote:
“Life without idealism is empty indeed. We must have hope or starve to death.”
—Pearl S. Buck