TOO MUCH: Chronicles of Inequality (Oct. 14, 2013)

The Great Gatsby Curve/ This striking infographic from Bloomberg Visual Data neatly depicts how rising income inequality tends to slow upward social mobility.

McCutcheon had wanted to give candidates and party panels much more than that. Under the law, he couldn’t then — and he can’t now either. The current, inflation-adjusted aggregate limit for the 2014 congressional elections: $123,000.

But wealthy individuals like McCutcheon, thanks to previous court decisions, canspend on their own, independently of candidate and party campaigns, as much as they want to influence a federal election’s impact.

In other words, a billionaire can’t currently give a particular congressional candidate a $1 million check. But the same billionaire can legally hand a TV station $1 million to run 30-second ads that extol that candidate’s virtues — or attack that candidate’s opponent.

This sort of “independent expenditure” can make a major impact as campaigns play out. Independent expenditures can also complicate campaigns, especially when deep-pockets go “off-message” in the advertising they finance. In most situations, candidates and political parties would much rather have billionaires contribute directly to them and not go off and spend independently.

If the Supreme Court uses the McCutcheon case to erase our last remaining Watergate-era campaign funding limits, these political insiders will get their way. They would be able, for the first time in years, to solicit unlimited contributions from America’s wealthy.

That turn of events, public interest groups are pointing out, would leave political candidates and party officials even more eager to grant wealthy donors “improper influence.”

At last week’s Supreme Court hearing, U.S. solicitor general Donald Verrilli Jr.did his best to explain why. Without limits on direct contributions to candidates and parties, he argued, 500 exceedingly wealthy Americans would be able to bankroll the entire the whole political “shooting match.” We would have, Verrilli charged, government “run of, by, and for those 500 people.”

Fred Wertheimer, America’s elder statesman of campaign finance reform, has a warning of his own. Repealing limits on direct contributions to candidates and parties, he contends, would take us right back to the same political corruption that led to the Watergate scandals.

But Wertheimer may be understating the danger. Repealing limits on direct contributions to candidates and parties would likely create a political environment far more toxic than anything right before Watergate.

The reason? Back before Watergate, in the mid 20th century, America’s rich didn’t have nearly as much wealth available to spend as the nation’s rich today. The incomes of today’s wealthy simply tower over the incomes of America’s wealthy in the years right before Watergate.

Some numbers: In 1972, the year of the Watergate burglary, the nation’s top 0.1 percent averaged, in today’s dollars, the equivalent of $1.48 million in income. In 2012, America’s top 0.1 percent averaged $6.4 million, over four times as much.

But the gap between rich then and rich now becomes even greater when you take taxes into effect. In 1972, taxpayers averaging $1.48 million in today’s dollars paid 40.7 percent of their total incomes in federal income tax. In 2012,note Tax Policy Center estimates, taxpayers in the top 0.1 percent paid federal income taxes at about half that rate.

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The bottom line: America’s really rich in 2012 had over six times more after-tax dollars in the pockets, after inflation, than their counterparts in 1972.

Watergate corruption? If the Supreme Court ends all limits on what our contemporary super rich can throw into election campaigns, American politics faces dangers far more troubling than anything Richard Nixon ever imagined.

Harold Meyerson, Two-Faced: The Democratic Party’s Divergent Future,American Prospect, October 10, 2013. Cory Booker feels that the forces for progressive social change apparently include the very poor and the very rich. Bill de Blasio doesn’t.

John Colby, Redistribute wealth, don’t cut food stamps, Providence Journal, October 11, 2013. A psychologist exposes the vapid rationales of budget axe-happy lawmakers.

Matías Vernengo, Crooks, Liars, Idiots, and Plutocrats, Naked Capitalism, October 14, 2013. A University of Utah economist dissects the federal shutdown crisis.

The video, the intro chapter, and the basic background for this new history of the triumph over America’s first plutocracy

Our federal tax code currently has just one tax bracket to cover income above $400,000 for single filers and $450,000 for joint returns. Income over these thresholds faces the same 39.6 percent tax rate.

Years ago, our tax rates didn’t work that way. Our tax code drew distinctions between merely rich and mega rich. Tracey Roberts traces these distinctions in this fresh new research on America’s tax brackets down through the years.

Roberts doesn’t just trace. Her new paper adjusts all the historical tax bracket data for inflation. These adjustments help us see, in quite vivid detail, how federal income taxes have, as Roberts puts it, “become flatter, more compressed, more complex, and less transparent over time.”

The beneficiaries of this tax bracket compression? America’s really rich.

One example: In 1963, the federal tax code sported 24 tax brackets. The third tax bracket that year applied a 26 percent tax rate to income between, in today’s dollars, $30,313 and $45,470. The 24th and top tax bracket applied a 91 percent tax rate to income over $1,515,651, as also expressed in today’s dollars.

In 2012, by contrast, we had only six tax brackets. The third of these applied a 25 percent tax to income between $35,350 and $85,650. The sixth and highest 2012 tax bracket applied a 35 percent tax to income over $388,350.

An American who made $40,000 in 2012 paid taxes, as a result, at essentially the same rate as an American who made the equivalent of $40,000 in 1963.

But an American who made over $1.5 million last year paid taxes on that overage at just a 35 percent rate, well less than half the 91 percent tax rate on income over $1.5 million, in today’s dollars, back in 1963.

We have today, in short, progressively graduated federal tax rates for everybody — except the super rich.