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Romney, GOP don't want to talk about inequality, but it's not going away

Republicans don't like us to talk about inequality. But we all know there's a growing gap between rich and poor.

Republicans don't like us to talk about inequality. But we all know there's a growing gap between rich and poor. And Wednesday on The Last Word, Timothy Noah joined Lawrence O'Donnell for a fascinating, in-depth discussion of the issue.

Noah—a writer for The New Republic and the author of a new book, The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It—said Republicans have used a sequence of tactics to try to deflect concern over the problem since it began to generate mainstream media attention last year. 

"First they tried to deny that the issue even existed," he said. "Then they tried to say it's justified by the fact that upward mobility in the United States is so much swifter than elsewhere. Which turns out not to be true—the U.S. lags most other western democracies when it comes to mobility. And finally they've just given up and said, let's not talk about it at all."

Indeed, as O'Donnell noted, Mitt Romney dismissed concern over the issue as "envy" in an NBC News interview earlier this year. 

Noah went on to recount how we got here.

"We had a long period, from about 1934 to about 1979, when incomes in the United States were growing more equal, not less equal," he explained.  "And there were a number of causes for that, but it had a lot to do with government policy, it had a lot to do with the rise of labor unions. We had a growing high-school graduation rate, which leveled off in the 1970s, and of course we had serious regulation of Wall Street, which began to deteriorate in the 1970s."

Today, O'Donnell noted, efforts to raise the top rate from 35%, in order to make the richest Americans pay a bit more, are denounced as class warfare. But Noah explained that we've had far higher top rates than that in the past, with no adverse impact on growth.

"The top marginal rate stayed above 90 percent not just through World War II but thru the 1950s, until the tax cut of 1964," he said. "And during those years, with a 90 percent top tax rate, we had a level of prosperity that we would kill for today."