While income inequality in the United States has hit record highs, so too has the decibel level from the tragically rich protesting their victimhood in the new class warfare. After walking back his "Kristallnacht" Holocaust analogy, legendary venture capitalist Tom Perkins nevertheless fretted that the 1 percent faces "economic extinction." Sam Zell, the billionaire chairman of Equity Group Investments, defended Perkins by declaring "the 1 percent work harder." Home Depot founder Ken Langone warned Pope Francis that his donations to the Church might dry up if the Vatican's words about the income gap kept flowing.
For Perkins, who blasted an "amateur" President Obama for his "demonization of the 1 percent," complained:
"This whole tone has changed between the last very recent years under this administration I think."
But if Tom Perkins and his ilk really want to turn back the clock, they might want to think twice.
Perhaps they'd like to go back to the days before Barack Obama became president. But the Dow Jones hasn't just doubled since Obama entered the White House. There's no shortage of studies to show that stock market returns are higher under Democratic leadership. As Slate in 2002 and the New York Times in 2003 found, "It's not even close. The stock market does far better under Democrats." And as Bloomberg News documented two years ago, Barack Obama has been no exception:
Maybe the uber-rich would like to return to the days of Ronald Reagan. But if so, they'd have to kiss today's sky-high corporate profits goodbye:
The titans of the boardroom would also have to roll back CEO compensation. Today's grotesque 273-to-1 CEO-to-worker pay ratio would shrivel to a merely offensive level of 30-to-1:
The annual pay packet would be little lighter, too. The CEO's of the largest 350 firms currently taking home about $14 million a year would instead have to scrape by with only $1.5 to 2.0 million.
Of course, their wealth wouldn't be growing as exponentially if capital gains tax rates were higher than they are now.
If paying 20 percent (plus 3.8 percent more to help Obamacare) on their investment gains is too much, perhaps the gilded class would like to return to Reagan's policy. Then, ordinary income and investment income were identically taxed at 28 percent. Or perhaps Perkins and company would prefer the late 1970's, when Uncle Sam took a 40 percent bite out of long-term capital gains.
Only with the "fiscal cliff" deal in 2013 did the effective tax rate for the 1 percent return to its pre-Reagan level. Conservatives who would like to go back to the American economy's halcyon days in the late 1950's and early 1960's would be more than welcome to do so. Back then, the 1 percent paid 44.4 percent tax on its income. The 0.1 percent paid 60.0 percent and the richest 0.01% of Americans paid a 71.4 rate.
How bad could it be? After all, the data show that the U.S. economy grew faster, produced more jobs and expanded incomes when tax rates were higher--even much higher. Of course, back then the great American middle class was bigger and healthier, in no small part because of the strength of American unions:
Nothing sets off persecuted plutocrats more quickly than the words, "estate tax." So, if today's 40 percent rate on individual estates larger than $5.34 million (a levy paid by less than a quarter of a percent of all estates) is so egregious, perhaps Sam Zell and the Walton family would like to party like it's 1999. Then again, their estates would have to pay a 55% rate on assets above $650,000:
Of course, America's super rich don't want to go back to some mythical Golden Age. As the numbers show, this is their Golden Age. And as the obscenely wealthy pull away from the merely wealthy, Tom Perkins, Sam Zell, Ken Langone and their exclusive club know they've never had it so good.
