America can't wait any longer. Trillions of dollars are urgently required to repair and expand the aging physical infrastructure that permits our economy to function. American tax revenue, the lifeblood of any national rebuilding effort, is not adequate for the job. In fact, our reduced tax revenue has become the single most vexing and important political problem we face, yet our politicians are unable to confront it. Trillions of dollars are also necessary to rebuild our failing public schools and our fire and police departments, before we even consider delivering improved universal health care, effective mass transit or renewable energy.
The opportunity to accumulate wealth is one of the great engines of our economy, but that opportunity is lost without the support of a well-functioning societal infrastructure. Failure to improve America's economic foundation will condemn us to second-tier global status. Unrepaired roads, substandard electric grids, inferior rail transport, lackluster public schools, unfulfilled health promises, bridges, parks, sewers and water projects crumbling or unusable -- these problems will not be solved until America's ultra-rich stop resisting fair and graduated taxation.
In today's economic crisis, many citizens still mistakenly believe our taxes are graduated and fair. They are not. The graduated income tax, begun in 1913, set the top rate at 7% on income over $500,000 ($10 million today). When the Great Depression arrived, the top bracket increased to 63%, and at the onset of World War II climbed to 94%. That last astronomical level kicked in at an annual income of $200,000 ($2.6 million today). Revealingly, during the prosperity of the 1950s, the top bracket remained at 91% until 1963. Since then, it has steadily declined to 35%, where it remains.
Because of today's convoluted tax code, which makes deductions and loopholes disproportionately available to ultra-high earners, many of those with incomes in the stratosphere actually pay a smaller portion of their total income than the rest of us. Similarly, corporations with multi-billion dollar annual profits escape fair taxation through complex foreign investments, loopholes and depreciation allowances that leave many of them paying less proportionately than much smaller businesses.
Two core pieces of propaganda have gradually become pervasive and now prevent politicians from passing tax increases on ultra-high earners and the ultra-wealthy. These politically motivated misunderstandings are, first, the demonization of "big government" as riddled with waste, fraud, and abuse, and second, the belief that taxing the ultra-rich somehow hobbles the economy and reduces employment opportunities. These misrepresentations are new. Throughout the Great Depression, Americans applauded "big government" and the sweeping laws that rebuilt our fractured economic structure and saved our nation. During World War II, they watched "big government" manage the remarkable industrial expansion that supported our military and won the war. And, during the Fifties, the highest tax rates in our history did not prevent a period of great prosperity.
In the late 1960s, however, President Johnson's War on Poverty and his vision of a "Great Society" swung the political pendulum toward more liberal government, until the pendulum crashed into Vietnam. That war fractured the liberal coalition, derailed Johnson's plans, and gave Republican ideologues the opportunity to exploit the resulting confusion. They invented a very effective straw man - the threat of "big government."
Alienated middle-class voters were driven into the waiting embrace of these conservatives who advertised symbols of government ineptitude and excess: gasoline shortages, long lines at the DMV, "welfare queens," $2,000 hammers on Pentagon shopping lists. George Wallace, Richard Nixon, and Ronald Reagan all championed this anti-government, anti-tax ideology, and by the 1980s it was enshrined as conservative dogma.
Today, this dogma is unassailable right-wing political gospel, so compelling that we find an aging Tea Party activist holding up a sign saying, "Keep your government hands off my Medicare." For him, the irony that Medicare is a hard-won "big government" single-payer program is entirely lost.
Dogma this strong is not easily undone. Presently, it is beyond the will or the capacity of our elected officials to confront these political misrepresentations. The solution now lies entirely in the hands of philanthropy. It is only the philanthropic community, acting strategically, that can launch and fund a multi-year public education campaign to teach Americans about the proper role of taxation in society. Such a campaign, on the scale of those used to curtail tobacco use or convince people to recycle, can succeed because these anti-tax, anti-government attitudes are relatively new and are readily countered by powerful and long-held American values.
Most citizens remain firmly committed to the notion that everyone should pay his or her fair share of taxable income. A scientifically based public education campaign can bring the issue of fairly taxing ultra-wealthy individuals and corporations to the center of the political debate. Americans will respond, if given enough unbiased information over a substantial period of time.
The politically cynical manipulation of our fears about jobs and social programming must be rolled back. We all want and deserve a working infrastructure, good schools, secure borders, safe air and water, reliable mass transit, fair and reasonable healthcare, and cleaner energy. Instead of constantly trying to fill in the empty holes left by underfunded government programs, private philanthropy must take on a more strategic role and help Americans understand their best interests. The ultra-wealthy must recognize that America has supported their success. It's time for them to willingly pay their fair share to support America's future.
Bill Zimmerman is a partner in Zimmerman & Markman, a California political consulting firm. Thom Mount is a motion picture producer and former president of the Producers Guild of America and of Universal Studios.