Or, more precisely, it’s not working for the U.S. economy. Corporate profits are surging and investment income is up, but that’s in large part because our corporations are doing their hiring in low-wage nations abroad — the Wal-Marts in China, the high-techs in India. In the era of globalization, cutting taxes on the rich generally and on investment income in particular does benefit a number of nations’ economies. Just not our own.
All taxes are not created equal. If there ever was a rationale for cutting taxes on investment rather than labor, it has utterly ceased to exist in an age when American corporations no longer hire at home. Shifting the tax burden from the rich to college students, though, is worse than pointless, unless Arnold’s goal is to dumb-down a knowledge economy. It actually leaves us at a competitive disadvantage to other states that still believe in sending their kids to college.
But knowledge is so totally over. In D.C. and Sacramento, we’re all about ideology.