Monday, January 02, 2012

Out With The Old In With The New

The New Year has finally arrived, and with it old things have or soon will be put away.

Among them are former U.S. Senator Chris Dodd, now comfortably ensconced in Hollywood as the chief lobbyist for the Motion Picture Association of America and, within the year, U.S. Senator Joe Lieberman, once a Democrat and now an Independent. It may be worth mentioning that Mr. Dodd’s last vow in leaving office is that he would not – no, never – become a lobbyist.

This sweeping out of the old is what is called in politics a “sea change.” Some things, of course, will not change. Connecticut will remain a blue state even if by some stroke of Divine Providence a Republican is able to wrest Mr. Lieberman’s soon to be vacant seat from progressive or liberal Democrats. Connecticut’s congressional delegation has for a long while been the private preserve of the Democratic Party and presently is home to three millionaires: U.S. Senator Dick Blumenthal and U.S. Reps Rosa Delauro and Jim Himes, who made his money on Wall Street.

Mr. Dodd waited until his lobbyist job opened before becoming a millionaire. If Connecticut’s Democratic millionaire office holders were to be transported back in time to 1942, during the reign of progressive war president Franklin Delano Roosevelt, they would be paying in taxes more than 100 percent of their salaries.

Before World War II, fewer than 5 percent of Americans paid income taxes. From 1940 to 1942, personal exemptions were drastically lowered and the number of Americans paying income taxes jumped tenfold, from $4 million to 39 million. The year 1942 introduced the first mass tax in U.S. history and was also the first year of withholding taxes at the source. Congress passed the first income tax law in 1913-14. The tax was made retro-active so that dollars could be immediately extracted from millionaires, but to ease the pain of payments the 1913 tax was payable in 1914, a lapse in payment that lasted thirty years. FDR’s much broader tax subjected some taxpayers to double taxation in 1943. The Current Tax Payment Act of 1943 forced some millionaires to pay double taxation and eliminated the lapse. Result: For each of the war years, 1944-1945, those earning $1 million per year owed $1,006,750 in taxes. When Democratic U.S. Senator Allen Ellender of Louisiana was asked how some people could pay more in taxes than they earned, he replied coolly, “I submit that the [rich] taxpayer is likely to have accumulated sufficient assets with which to make the necessary income payments.” Even at confiscatory rates, Mr. Roosevelt was convinced that millionaires were not paying their “fair share” in taxes, according to a luminous article in The American Spectator written by Burton Folsom and Anita Folsom, the authors of "FDR Goes To War."

It is a safe bet that none of the members of Connecticut’s bluer than blue progressive congressional delegation would admit to being quite as progressive as FDR. Millionaires Mr. Blumenthal, Mrs. DeLauro and Mr. Himes, asked to contribute their “fair share” in taxes as “fair” and “share” were understood during FDR’s presidency, very likely would resist the imposition.

At the turn of this year, Connecticut’s media was full of swan songs in a minor key as Mr. Lieberman sought an exit door that would not bang him too fiercely on the rear. So off message was Mr. Lieberman with progressives and peace-at-any-price Democrats that it must have seemed to them the life-long Democrat was on the verge of bolting his party.

In foreign policy matters, Mr. Lieberman is what used to be called a “Scoop Jackson” Democrat, nearly the last of a dying breed. Mr. Lieberman disagreed sharply with Democratic candidate for president Barack Obama’s views on foreign policy, and his hawkish ways did not endear him to those in his party who, along with Mr. Obama, vigorously resisted what they regarded as President George Bush’s war in Iraq. When Mr. Lieberman backed then Republican Party presidential contender John McCain over Mr. Obama, he crossed a bridge too far. A political neophyte, Ned Lamont, challenged Mr. Blumenthal in a party primary, defeated Mr. Lieberman and was in turn defeated in the general election after Mr. Blumenthal had re-entered the lists as an Independent.

A liberal in domestic policy and a “Scoop Jackson” Democrat in foreign policy, Mr. Lieberman’s leave taking will mark, for good or ill, the end of an era.
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