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Former Bush Advisor Greg Mankiw Wants Even More Wealth Inequality

Pictured: plutocracy brings a smile to his face. (by X Ge)

On Friday, Hugh Hewitt provided a useful reminder of just how radical the right has become by attacking cap-and-trade and the EPA — both conceived by Republicans — as sinister socialist plots.

As if on cue, Greg Mankiw offers this bit of wingnutty advice to President Obama.

STOP TRYING TO SPREAD THE WEALTH Ever since your famous exchange with Joe the Plumber, it has been clear that you believe that the redistribution of income is a crucial function of government. A long philosophical tradition supports your view. It includes John Rawls’s treatise “A Theory of Justice,” which concludes that the main goal of public policy should be to transfer resources to those at the bottom of the economic ladder.

Many Republicans, however, reject this view of the state. From their perspective, it is not the proper role of government to fix the income distribution in an attempt to achieve some utopian vision of fairness. They believe, instead, that in a free society, people make money when they produce goods and services that others value, and that, as a result, what they earn is rightfully theirs.

First things first. This notion that Obama somehow dreamed up progressive taxation is as stupid as Joe the Plumber. These “many Republicans” Mankiw mentions doesn’t include Teddy Roosevelt, one of the earliest champions of the progressive tax.

A heavy progressive tax upon a very large fortune is in no way such a tax upon thrift or industry as a like would be on a small fortune. No advantage comes either to the country as a whole or to the individuals inheriting the money by permitting the transmission in their entirety of the enormous fortunes which would be affected by such a tax; and as an incident to its function of revenue raising, such a tax would help to preserve a measurable equality of opportunity for the people of the generations growing to manhood.

Louis Brandeis wrote,

We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.

And noted socialist Thomas Jefferson wrote in 1785,

Thomas Jefferson suggested that taxes could be used to reduce “the enormous inequality” between rich and poor. He wrote that one way of “silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise.”

The richest Americans were paying 91% of their income when Dwight D. Eisenhower was president. When Richard Nixon was in the White House, it was still in the 70s. And for 6 of Reagan’s 8 years in office, the wealthiest paid 50% or more.

So progressive taxation has a long and rich tradition in America, and it was wildly successful at building a strong middle class and a strong democracy.

Besides, “many Republicans” also believe Obama is a Muslim, that global warming is a leftist hoax and that the Earth is 10,000 years old. Should Obama have the Department of Education change all the science books in our public schools to appease them?

But the worst part of Mankiw’s suggestion that Obama embrace a flat tax is that we’re living in a time of record inequality — the top 1% have a greater net worth than the bottom 90%. That inequality is having a corrosive effect on our democracy and our society. And to suggest that we exacerbate this further by cutting taxes even more for billioniares is just disgusting, offensive, morally repugnant.

Remember: Mankiw is not some wingnut radio host in Tuscaloosa. He’s a Harvard professor and a former advisor to George W. Bush, and he’s looking at the deficit and massive wealth inequality and saying, “more please.” This is where the right is in 2011.

Gonna be a fun year.

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