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Editorial: Democrats' radical idea vs. GOP's trickle-down theory

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Posted on July 7, 2016 |
By Angelo Lynn



Give Vermont’s Democratic gubernatorial candidates an A-plus for optimism. They are doers, intent on making Vermont stronger, healthier, wealthier and smarter. With just a few degrees of separation between their stances, they would work to provide free tuition at state colleges, increase the minimum wage to $15 per hour, continue to build the state’s infrastructure (roads, bridges and railroads), strengthen downtowns, expand early childhood education, create more affordable housing, reduce Vermonter’s reliance on fossil fuels and create a more dynamic state economy.

Whew, that’s a bundle.

It is what many supporters like about Democrats: they view the role of government as guiding the economic forces in a way that benefits the greatest good, and they don’t mind asking those who have become wealthy (because of the advantages our capitalistic system affords the wealthy) to help those who are struggling to make ends meet or to better themselves.

The radical idea here, embraced largely by Democrats, is that’s the way it should be.

Many Americans hold true to that principle: that if you benefit from the nation’s business environment, you should gladly give back to others, so that a rising tide rises everyone’s good fortune. That was America in the 1950s, ‘60s and ’70s.

Even Republicans once embraced that sentiment. There was a time in this country, not that long ago, when income taxes on the rich were 70 percent. The rich complained, of course, but America’s vibrant middle class made millionaires out of thousands of Americans and provided great opportunities for other entrepreneurs to do the same. Paying high income taxes simply meant that you had made it to the top of the economic ladder and most could still afford two martini lunches at the country club.

It was not until 1981 that President Ronald Reagan reduced the maximum tax rate from 70 percent to 50 percent. Five years later, in 1986, he reduced it again from 50 percent to 28 percent. During that time, by the way, the national debt tripled from $997 billion to $2.85 trillion — moving the U.S. from the world’s largest international creditor to the world’s largest debtor nation.

Not to burst the bubble of Republicans enamored by the myths of Reagan’s presidency, but even President Reagan understood what he had wrought, describing the change in the nation’s debt as the “greatest disappointment” of his presidency.

To give him credit, Reagan did sense the economic havoc he created and reversed course in 1982 by rolling back corporate and individual tax cuts, undoing about a third of the initial decreases by increasing payroll taxes on Social Security and Medicare. And again, in 1984, he signed legislation to close tax loopholes. The tax increases he put in place reportedly represented the “biggest tax increase ever enacted during peacetime,” though the net effect of his eight years in office significantly reduced taxes on the wealthiest Americans and helped create the debtor nation we remain today.

**********

That history figures prominently into today’s politics.

All three of Vermont’s Democratic gubernatorial candidates embrace the essence of what is a diminished progressive income tax system — basically, the more you have, the more you give back. In theory, that closes the wealth gap, makes society more congenial, and helps those at the middle and bottom rise upward.

Some Vermont Republicans embrace that sentiment as well, though not as vocally as they did in era of Sen. James Jeffords, Sen. Robert Stafford, Gov. Richard Snelling and other Republican moderates who ruled with what can only be described in today’s terms as extraordinary grace.

They understood basic economics, and were critical of the “voodoo economics” (the term Republican presidential candidate George H.W. Bush gave of Reagan’s tax cuts and his vision to jumpstart the economy by running up the nation’s debt) that Reagan championed.

Odd, then, that Republicans today are still championing such discredited thinking. They are still embracing Reagan’s failed “trickle down” economics.

Today, however, there are real demonstrations of what happens when you don’t embrace a progressive tax system, and instead embrace tax cuts to the wealthiest few. Kansas is the struggling poster child of the Republican experiment.

Following the lead of one of the most rightwing governors in the country (Republican Gov. Sam Brownback) is one of the most rightwing Legislatures in the country, and the combination has led the state right over an economic cliff. Since passing draconian tax cuts for the wealthiest 10 percent four years ago, while increasing fees and taxes on the middle-and lower-class Kansans, the state has faced huge deficits repeatedly. But because Brownback and the Legislature have refused to rescind the tax cuts, the state’s only choice has been to cut out of the state budget. Consequently, school budgets have been gutted; college systems are facing double-digit tuition increases; road and bridge construction has been seriously eroded and repairs delayed; hospitals have been put in jeopardy and the state’s safety net is tattered and on the brink of dysfunction.

Thankfully, Vermont — despite its perceived problems — is what may be the polar opposite politically of the Jayhawk state. Recent initiatives in Vermont, for example, have added tens of thousands of Vermonters to health insurance, expanded early childcare, devoted money to drug rehab programs, doubled-down on spending on its infrastructure and much more. Meanwhile, Kansas has decimated its Medicaid payments, axed residents from health insurance and underfunded education.

Vermont Republican gubernatorial candidate Bruce Lisman sounds most like Donald Trump in his anti-tax, anti-big government rhetoric that also favors big business solutions, though Lisman is far more reasonable and has an intelligent platform on a host of issues. Republican Phil Scott is less strident, but also proposes tight spending and a restricted role for government. Neither champion free college tuition, significant increases in the minimum wage, expanded health care, lower carbon dioxide pollution and a greater reliance on renewables. Rather, Lisman and Scott used the same old Republican song Reagan crooned when he suggested that cutting taxes would boost revenue, that he could cutting spending just by better management and decreased regulation, and that market forces would fix a sluggish economy.

It is classic party politics: Democrats want to build a progressive society with the tools government affords, and Republicans want to keep government at bay to allow the market to dictate who best can capitalize on society’s needs.

Vermont’s primary is just a month away on August 9. Democrats will choose between Sue Minter, Matt Dunne and Peter Galbraith; Republicans will pick either Bruce Lisman or Phil Scott. If you haven’t been paying attention, it’s not too late — and it’s more important than ever.

Angelo Lynn

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