The Horrible Legacy of the Baby Boomers, Part 1: Taxes

American politicians and pundits usually talk about taxes in a certain way. The focus on the micro level — like the tax burden for an “average” American family will be, or a “middle class” American family. Never mind that many households making $500,000 a year — which puts them in the top 5% nationwide — still think of themselves as “middle class.”

But taxes are best understood from the macro level, because they are a macro tool. Every American worker — hundreds of millions of us — have to file income tax returns. Taxes provide revenue for our entire government, for every government service we take for granted, from our military to our mail carriers to the people who plant and harvest our food.

Remember, taxes were integral to the founding of our country. The revolutionary rallying cry was “No Taxation Without Representation!” It’s important to remember that all four words were important. The founding fathers weren’t saying that no one should pay taxes: the crux of the argument was that taxes should be used to directly benefit the people who pay them. It is the fiscal expression of the democratic system.

Federal taxes are a powerful engine that we can use to turn our free market wealth into an organized, civil, and free society. We often refer to an unregulated market as “the Wild West.” Free market supporters see that as a good thing — it’s unbridled capitalism with little regard for fairness or regulations. But mature citizens understand the implications of that analogy — in the Wild West, crime and vigilante justice ran wild. We don’t want a free for all. We want civilization. And it’s a group effort.

Perhaps no American generation understood the philosophy and the stakes of a large-scale commitment to a just society better than those who fought in World War II. Millions of their young men fought and defeated fascism. Millions of women stayed home and worked in factories and assumed the levers of production to arm that effort. The Greatest Generation had grown up in an America where Government had introduced actual policies to pull civilization out of a Depression — and it worked. There was a visceral understanding and a connection between the idea of shared sacrifice on a micro and a macro level.

They endeavored to pass that ethos on to their children.

The top marginal tax rate was 90% for all of the Boomers’ childhood

The Baby Boomers grew up in a world where their parents and grandparents — especially the wealthiest of them — paid taxes at significantly higher levels than they do today. Those taxes kept public colleges extremely affordable. They funded the national highway system. The development of the vaccine for polio. They paid for Americans to be the first humans to set foot on the moon.

But then something happened. Something changed that view, or more accurately, someone. The biggest generation America had ever seen.

As the Baby Boomers have aged and secured a vise-lock on political power in America, they have consistently voted for politicians who lowered their own taxes. When the government started running surpluses in the late nineties (which made sense, because the huge Boomer generation was in its prime earning years, and would need to save for for its health care later in life), Boomer candidate George W. Bush told Americans that surpluses were “their money” to spend as their wished, and as President he pushed through two massive tax cuts.

The Boomers’ parents grew up during the Great Depression, which had followed the financial excesses and inequality of the Roaring 20s. There was a profound sense among this generation that financial distress could be a result of unfortunate circumstance, not moral inferiority. There was a sense of noblesse oblige within the country and the establishment — that the rich had a duty to give back to the country that had blessed them. In the 50s and early 60s, when the Boomers were children, the top tax rate was 90 percent.

But that ethos wore away as the Boomers started to reap the wealth that this great Country had afforded them. During the Boomer’s childhood, the amount people could pass on to their children tax free was $60,000, or roughly half a million dollars in today’s money. That threshold has been raised and raised. It now stands at $5.6 million dollars — or $11.2 million dollars per couple, which means that only half a percent of US families even pay the tax. The current Republican tax bill will double that threshold to $11.2 million dollars — $22.4 million tax free inheritance dollars per family.

As the Baby Boomers have neared retirement and their parents have died, estate tax exemption levels have been doubled and triped and the share of families paying estate taxes has plummeted.

As these policies have changed, and the rich have paid less and less in taxes, the effects have hit our society hard. Students now take out tens and hundreds of thousands of dollars in loans to attend top colleges. Our infrastructure is badly outdated. Inequality is now worse than it was in the roaring 20s.

George W. Bush and Donald Trump pandered to Boomers with nakedly self-serving policies. In a bill co-sponsored by Paul Ryan, Bush tried to privatize Social Security, but only for people younger than 55. In essence — guarantee the Boomers’ entitlements, but invite everyone else to play the lottery to get better returns. Trump was even more blatantly biased in his policy promises: in the speech declaring his candidacy, he vowed to destroy Obamacare while vowing not to touch Medicare, Medicaid or Social Security. The preferential treatment worked. Both George W. Bush and Donald Trump won majorities of Boomer votes, which were the difference in their elections.

The Baby Boomers’ ascendancy to political power in the late 70s has coincided with an explosion of inequality. Tax cuts and anti-union sentiment became conventional, even sacred, political wisdom.

Which brings us to today. The tax bill that the Republicans are about to pass is unfair for two reasons. First, it gives even bigger tax breaks to the richest 1% of Americans — when they are already richer than they have ever been.

Secondly, the bill “sunsets” many of these tax breaks in 2025. While the 20% corporate tax rate is permanent, the individual tax cuts — and even the paltry $300 increase in the child tax rebate that Marco Rubio sold his vote for — are designed to end after five years. The GOP tax bill literally could not have passed without raising taxes on future earners — it’s the only way to sneak the cost under the maximum $1.5 trillion dollar increase to the national debt. So, the text of the bill itself is an admission that these cuts are unsustainable and will have to be mitigated by tax hikes later on. In 2025, the first Baby Boomers will be turning 80. The overwhelming majority of Boomers will be out of the workforce and collecting Social Security and Medicare benefits.

So this bill assumes that, as the Boomers’ parents did, their children will have to pay a drastically higher tax rates to subsidize their care and to finance their standard of living. It is the bookend to the New Deal ethos of the Boomers’ youth: as our parents sacrificed for our future, so must our children pay for our mistakes.

This massive tax cut is Donald Trump’s pride and joy, the only policy he truly cares about. In the week after his election, it was the first thing on his mind — he went, without alerting the press, to one of New York’s toniest restaurants to tell its cheering wealthy patrons not to worry, he would “get their taxes down.” When this bill passes, it will provide a financial bonanza for himself and his family. Trump is a fitting protagonist of the Boomers’ political story — living in a reality where his own needs are not just primary, but all-encompassing. No appreciation of the sacrifices of the past. No feeling of responsibility to the generations to come.

The Boomers certainly aren’t the first American generation to fall prey to short-sighted selfishness. But none has had ever been given more worldwide power. No generation has had so much to give back.

This tax bill, if it passes, will be the coup de grace of a shameful story of squandered potential.

The hypocrisy of the Boomer generation doesn’t end with fiscal policy. For how it applies to social issues like abortion, read Part 2.