Yet another conservative think tank has been established in Washington DC, called the Foundation for Research on Equal Opportunity (FREOPP, as they call themselves). They intend to concentrate their attention on people with below-median incomes or net worth, looking at conservative market principles and harnessing or bending them to help Americans struggling to survive in the transition from manufacturing to an information economy. “It’s about helping people”, Lanhee Chen, Romney’s former policy advisor, is quoted as saying. “Conservatism needs to be about listening more and lecturing less”. Gasp!
Wonderful what the imminent death of your political party can do to the imagination! For decades these people have ignored their middle class (working class to the British) supporters, bestowing all the attention and goodies on the very rich who, in return, finance them. America is, as a result, disgracefully unequal, and power is concentrated in a tiny minority of coddled wealthy. Suddenly, conservative intellectuals, faced with a huge revolt on the part of the proles, are having to actually think about the voters. Epicurus would be gracious about this development. He would probably say (in Greek) “Better late than never, although I think conservative principles are unlikely to offer an answer. But top marks for trying.”
I’m afraid I’m very sceptical of this new group. Fiscal conservatism has very little to offer to America’s working class, or even its middle class. Partly because the bottom 47% already don’t pay any federal income tax; any reduction in taxes will greatly benefit the wealthy. A reduction in payroll taxes may benefit them in the short term, but it would cost them in the long term due to the resultant deterioration of Social Security and Medicare, or the expansion of the deficit (or a combination of the two.) Other measures such as better infrastructure or education would benefit the wealthy as much as the poor, doing nothing to reduce income inequality.
What would actually reduce inequality and poverty would be a clampdown on income, capital gains and corporate tax avoidance. Everyone says they are in favour of this, yet nothing actually seems to get done. In addition to that, it will be necessary to raise taxes on the upper middle class to European levels. Conservatives are right in this respect: you can only tax the rich so much before they pass the cost of paying taxes to the less fortunate. The trouble is, no politician campaigns openly on middle class tax increases, because it is the upper middle class who vote at higher rates, making the solution to inequality an election loser.
Not half as sceptical as I am! But you are right about the American tax situation.