Here’s how Romney’s low taxes will be defended by smarter conservatives (the less smart ones will just shout “class warfare”): they’ll claim that there are compelling reasons to have low taxes on capital gains, and that there is therefore nothing wrong with having very high-income people paying lower tax rates than the middle class. David Frum offers a good example.

But Frum slips a fast one by us — and probably by himself, since he’s usually pretty honest in his reasoning. He declares that

The lower tax rate for capital gains is good policy—a policy that the US has followed almost from the inception of the income tax, a policy followed by almost every other advanced economy on earth (including some that don’t tax capital gains at all).

This conveys the impression that the current very low rates of capital gains taxation are the way it has always been. But that’s not at all true. Here’s the reality:

Source.

The current very low rates didn’t happen until 2003; in fact, long-term capital gains were taxed at close to 30 percent from 1986 through 1997, when Clinton cut a deal with Republicans to get an expanded earned-income tax credit. And dividend income also only started receiving privileged status in 2003.

So nothing in our history or experience says that unearned income has to be taxed this lightly. It’s not a time-honored principle; it’s a Bush-era innovation, pushed through the Senate, by the way, using reconciliation.