Wealth, unions, the beleaguered middle class and the last cookie
Original post made by Tom Cushing on Jul 12, 2011
There's truth in humor. Since the 1970s, abundance has migrated from the middle class to the wealthiest among us, on a massive scale. As of 2007, the richest 10% of Americans hold nearly 3/4 of this country's wealth. That is a banana republic-worthy statistic, and far out-of-sync with American traditions and perceptions. The imbalance is also unsustainable, as vibrant middle class spending and job creation are crucial to an American-style economy.
Individually self-reliant to a fault, middle class families have tried three unsuccessful strategies in ever more desperate attempts to stay even: spouses went to work, then everybody worked the world's most exhaustingly long hours, and then home equity savings were looted to cover current consumption. Finally, the real estate bubble that funded those second mortgages burst: the middle class is now tapped-out, tired and ticked-off.
Remarkably, however, instead of bargaining for more cookies, or advocating that the wealthiest few acknowledge their good fortune in fairer taxes -- the middle class has turned instead on public employee unions -- groups who have struck better deals and thus stayed closer-to-even. All motion is relative; the sinking middle class blames its nearest neighbors, who seem to be floating slightly higher. The wealthy are, apparently, above the fray. It's a dismal quarrel over the last cookie.
The political Right has done a masterful job mis-framing the debate, raising the specter of dreaded "socialism" (not remotely close to reality), "wealth redistribution" (which has already happened, benefiting the rich), and "class warfare" the only real example of which is the middle class turning on itself. The losers in a smaller government era will be users of government services, and the vulnerable: the needy, disabled folks, students and oldsters among them. The winners? You guessed it maybe the rich really Are different?
This is actually not to castigate the well-to-do for the vast improvement in their economic well-being. Instead, the lesson here is that the middle class must come to grips with its actual degraded circumstances, and direct its collective electoral influence toward the achievement of its self-interests revitalization of its job-creating engine and a reformed tax structure. Those real interests have little to do with beggaring public services or government employees.
We all have to fight for our cookies, and them that's got 'em are not on our side.
on Jul 13, 2011 at 7:57 am
The political right and Wall Street have done a masterful job of turning the public on government employees, thus deflecting blame from themselves and the banking/mortgage meltdown for our current financial crisis. Joseph Goebbels would be proud. I am a lifelong Republican, but it is no longer the party of Lincoln and being held hostage by Tea Party extremists is the last straw for me.
on Jul 13, 2011 at 8:30 am
Thank goodness! Someone else in Danville is saying what I have been thinking.
on Jul 13, 2011 at 10:26 am
I've moved this comment to the blog, as it does go to the arguments presented above:
"Posted by spcwt, a resident of the Danville neighborhood, 1 hour ago
Dear middle class,
The top 1% of taxpayers pay more income taxes than the bottom 95% combined (Yes combined. Look it up). You just raised taxes on "the rich" by $1 trillion to pay for a middle class healthcare entitlement. And now you want the rich to pay even more.
You want all the benefits of a European welfare state without paying for it. You want to be like Europe? Fine. Then pay for it. Europe has a value added tax. What do you pay? Jack squat. You live off the wealthy. You pine for an America that never was."
I think the equity of the tax system depends on rates each individual pays, not grossed-up collections numbers (in case yours are right -- you don't cite any sources). Warren Buffett, one of the world's richest men, seems to concur:
"Mr. [Warren] Buffett, who is worth an estimated $52 billion (£26 billion), said: 'The 400 of us [at a posh fund-raiser] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you're in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.'
Mr. Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent." Web Link
As to any "America that never was," in 1944 the top marginal tax rate for a married couple, filing jointly was 94%(!) on income over $200K. It has fallen steadily since then to where it is now 35% on income over $379K. Web Link
The effective rates are far less, for as we all know, IRS agents go home on weekends; tax lawyers and CPAs do not. In addition to the wealthy who aren't shy about defending their interests, there's a whole powerful tax prep industry, and lobby, devoted to keeping things just as they are.