I t was no surprise that a House committee extended the federal ban on Internet taxes last week, ahead of schedule and with little debate. By concentrating wealth in the hands of the richest, most heavily taxed Americans, the new economy is pouring money into federal and state coffers as never before. Blessed with limitless, relatively unsophisticated money and backed by a fawning media, Wall Street sold the new economy as fast as it could invent it. A torrent of initial public offerings, huge fund-management fees and stock options spectacularly enriched a select group of corporate executives, stockbrokers and investment bankers.
Richer people pay taxes at far higher rates than everyone else.
It was inevitable that relations among the government, the nation's stock-rich elite and the middle and working classes would be dramatically revised. Where state and federal bureaucracies were once skeptical of wealthy interests, in the 1990s they eagerly embraced the jackpot capitalism and trickle-down economics that so quickly rescued their budgets. Government, in fact, took an increasingly direct stake in its Wall Street benefactor. For their part, the new rich have willingly shouldered their vastly disproportionate, growing share of the nation's tax burden as long as their incomes continued to rise faster than everyone else's. The government's take of the nation's gross domestic product could quietly be pushed to postwar highs even as tax rates for all but the wealthiest citizens dramatically fell.