GOP cranks up class warfare again with tax-break plans. Time for a wealth tax

Creative enterprise is not stimulated by vast inheritances. They bless neither those who bequeath nor those who receive. [...] A tax upon inherited economic power is a tax upon static wealth, not upon that dynamic wealth which makes for the healthy diffusion of economic good. 'Franklin Delano Roosevelt, 1936

That reek you may have caught a whiff of is the aroma of Republican congressional leaders eager to continue a 2010 estate-tax cut worth an average of $1.1 million for roughly 7,500 multi-million-dollar estates. At the same time, they don't want to extend a change that was part of the same 2010 budget deal. That change strengthened the Earned Income Tax Credit (EITC) and Child Tax Credit. Failure to extend the change now would affect 13 million working-class families, costing them from a few hundred dollars to $2,500 annually.

The beneficiaries of this raw exercise in class warfare aren't hurting, to say the least. They are scions of the wealthiest Americans. Their immense wealth is built on growing inequality with which we've become all-too-familiar, most of us personally familiar. The median net worth of the middle class, those households in the 40th to 60th economic percentiles of the population, fell 29 percent between 2007 and 2010, to $65,900. The top 10 percent saw their net worth rise  to $2.9 million. The top 1 percent boasted a net worth of $8.4 million. That vast concentration of wealth, built upon vast inequality not seen since the 1920s, delivers political inequality for its owners. Out of that political inequality come changes, in and out of the tax code, that exacerbates the economic inequality. The plutocrats desire to take us ever onward down this path.

But, of course, even making mention of a wealth tax generates screams of "socialist." And despite its clear benefits, its innate fairness, the whole idea gives plenty of people who are nowhere near wealthy, including many liberals, the heebie-jeebies. That's a drag. Not because a wealth tax would solve all of America's economic problems. But a direct annual tax on household wealth would raise revenue, reduce inequality and, along with it, reduce unequal political power.

That obviously is not where we're at politically. Instead, compromises are cut while the plutocrats never surrender their ultimate goals. Let's take a look at the trajectory of the closest thing we've got to a wealth tax right now.

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