Notes on the Atrocities
Like a 100-watt radio station, broadcasting to the dozens...

Wednesday, June 23, 2004  

Let's have a war!

I'm re-reading Kevin Phillips' extraordinary Wealth and Democracy. (Actually, that's polishing the apple a bit--I've previously only read portions.) All liberals should consider this required reading--it's perhaps the most important book I've read in ten years. Vast and comprehensive, it is a wonderful tool for debunking not only the right's spin--but even our own, unexamined assumptions.

The moral to the story? Thanks to 25 years of Reaganomics, we now have a flat tax, and our (that is, the middle three quintiles) taxes fund vast government programs that protect the wealth of ultrarich investors. Every time the left brings up the topic of taxes, the GOP squeals about a class war. They know why: if we ever learned the truth, we'd be pulling the rich out of their Escalades and stealing their wallets. They appeal to our sense of fair play, hoping we won't notice which end of the shaft we've gotten.

Some of the most potent facts, keeping in mind that none of these data include Bush II tax cuts and assaults on the poor:

After-tax income, adjusted for inflation
Middle 20%, -3%
1977: $32,400
1999: $31,400

Top 20%, +38%
1977: $74,000
1999: $102,300

Effective tax rates, median vs. top 1% (income and FICA)
Median, Top 1%
1948: 5.3%, 76.9%
1970: 16.1%, 68.6%
1985: 24.4%, 24.9%

Corporate tax rates vs. payroll taxes
Corporate tax rate, payroll rate
1950: 26.5%, 6.9%
1970: 17.0%, 18.2%
2000: 10.2%, 31.1%

Household debt as a percentage of annual personal income (after tax)
1950: 38%
2000: 94%

Some taxpayer revolt, huh? This is, of course, only half the picture. The other half is spending, which has also turned against the non-rich (ie, the bottom 95%). Where liberals decided to spend their money on things like protecting Americans from poverty and sickness, conservatives since Reagan have sought protect the ultrarich from the dangers of losing money on a bad deal.

"Liberals, for their part, had built much of their 1932-1968 politics around collectivizing the risks of old age and indigence through programs like Social Security, welfare, and Medicare. Conservative government, especially in the eighties, undertook to collectivize a different set of risks, this time the perils to investors seeking high returns by putting money in precarious financial institutions, currencies, or overseas investments." (p. 93)

So the 95% of Americans who have not benefited from the tax restructuring now find their salaries stagnant, their taxes funding a larger piece of the federal pie, and their money going to fund programs that protect the investments of the ultrarich at the expense of collectivist programs that might, say, help them afford health care.

Now, who wants a class war?

posted by Jeff | 11:04 AM |
Blogroll and Links