Wage stagnation and income taxes

I have a hypothesis about why cutting taxes has become such a holy plank of the Right and, to a similar extent, Democrats as well.  The guiding question, along the lines of Thomas Frank, is: Why do so many people support less taxes when more taxes would be best for them? My basic idea, for which I have very little data at hand, is that normal people who agitate for tax cuts are driven by stagnant wages and increasing inequality.

Having seen nary a wage increase over the past thirty years while rich Americans became richer and richer and propagated their lifestyle to mainstream America, people started to see taxes (or were told to see taxes?) as the easiest way to increase their income.  It’s a lot easier to see how much taxes are costing you but virtually impossible to see the negative effects of weakened labor unions, Wall Street’s engorgement on debt, the ossification of Congress,  revolving doors, &c.  In business terms: when revenue is neutral, you cut costs to increase profits.  Americans have been deluded into thinking of taxes as a cost and not what they are, a means to stable, happy life.

What I am describing is basically a classic coordination problem: the interests of a small class of Republican elites are a lot easier to represent than those of diffuse demographies.  Of course, no one is stupid enough to say “I am for rich people paying less taxes, average people going into debt, creating an American aristocracy, and destroying the environment,” so a long time ago Republican strategists figured out they could just blame all ills on taxes and call all Democrat initiatives tax increases.

Mad that there aren’t as many good jobs?  (Wall Street needs labor.) Cut taxes!

Mad at our health care system?  (Pharmaceutical companies want to guard their profits.) Don’t raise taxes – companies will flee and then grandma will die!

Don’t understand global warming? (My energy pals don’t want you to know how expensive their products really are.) Democrats just want to raise your taxes!

(Please don’t have the government end our abusive practices.)  Consumer protection will cost money and raise your taxes!

In other words, rich interest groups are able to use the Republican party to use taxes as a red herring for anything against their interests.  And Democrats lack the courage to stand up to the Republican, a.ka. mainstream, media.  Instead, they just try to prove how much better they are at cutting taxes than Republicans.  With this dynamic, we lose and the winners win more.