Making Out Like Bandits: Growth of the Super-Rich
In my previous post I outlined the terrible implications of long-term high employment, but the truth is the middle class has been gradually disappearing for over three decades. In large part this is due to changes in tax policy. The entire economy has been hijacked by a cadre of the super-rich, causing almost all of the benefits of a growing American economy to go to those with money to waste while most Americans have watched their wealth stagnate and fall.
Tax rates have been debated off and on over the past year ever since the Bush tax cuts were set to expire. Democrats ultimately conceded to Republicans, and Obama signed a law extending these tax cuts another two years. Perhaps taxes shouldn’t be raised in a recession, but the argument has continued as politicians obsess over cutting the deficit.
The populist response has been to call for more taxes on the rich. In August investing tycoon Warren Buffett published an editorial endorsing exactly that, citing that he is taxed less than his secretary. This is because Buffett makes his money through capital gains, which is taxed at only 15 percent. His argument is the rich can easily afford to pay more and this will have no effect on investing. Obama wisely agrees, and in his recently released debt plan he has called for an increase in taxes on the super rich called the Buffett Rule.
We have a progressive tax code because of the moral belief that the richest among us have an obligation to help out those less fortunate in our society. But through years of tax cuts and loopholes, at a certain point our tax system has become blatantly regressive, providing massive gains to the rich while programs to support the poor and the public good suffer.
Of course every time someone proposes new taxes on the rich, it’s class warfare! That’s the narrative by Republicans and their mouthpiece Fox News. They say that taxing the rich won’t help our deficit problem. And they’re right. But that’s really not the point. Those taxes are certainly enough to sponsor a host of social programs that are vital to supporting the vast majority of Americans who the rich have been leaching their wealth from.
The immense growth in income inequality was brought upon by a Republican philosophy of supply-side or “trickle-down” economics. Republicans will cry that the rich and corporations are job creators. They believe if we just relieve tax and regulatory burdens jobs will magically be created and the money will trickle down through the whole economy. Looking at the statistics this is demonstrably false. Instead wages have actually gotten lower. And before you think this just applies to uneducated blue collar workers, this affects nearly everyone. A masters degree won’t even save you.
The middle class is extremely important to a healthy democracy, but the blind embrace of the trickle down philosophy endangers the foundations of our society. Capitalism is supposed to foster development that makes everyone more wealthy. However, this has not been the trend for quite some time now, and if it continues this is what leads to revolution. The rich rely on the ignorance of the vast majority of Americans, who are blinded by their own hopeless desire at striking it rich. But it’s time to open your eyes. Mother Jones can show you just how bad this inequality has become.
Taxing the rich won’t cure the budget deficit, but it certainly doesn’t hurt. I’m not arguing for socialism, but for the rich to recognize their social obligation to support those less fortunate. Republicans will say this is class warfare. They will probably cite that 50% of American pay no taxes (A blatant lie considering payroll taxes). But the reason so many pay no income tax is because the wealthy now possess all of the wealth in America. A class war is already raging, but it’s not against the rich. Now it’s time for the middle class to wake up and fight back.
Take it away Jon Stewart! (The embed isn’t working, but please follow the links)