ABSTRACT
The public sector persists in marketing the misleading illusion that American prosperity is tied to the affluence of the wealthy, and that government policies that improve the economic prospects of the wealthy will trickle down to the middle class. The middle class saw very little of the Reagan tax cuts, and the effective tax rate change was close to zero for virtually all American taxpayers below the top 10 percent of income earners. The increased presence of corporate lobbyists in Washington has contributed to policies that benefit investors by emphasizing short-term economic growth. Despite the negative long-term effects of cutting capital gains taxes, the idea was popular with politicians beholden to the interests of Wall Street and campaign finance, and there was widespread public support for the cut. Corporations in particular received huge tax breaks and in Washington the number of permanent lobbyists, most of them representing corporate interests, increased substantially.
