"Class Warfare"

The incomes of the top 1% wealthiest American households increased by almost 300% between 1979 and 2007 according to a report from the CBO (Congressional Budget Office) that can be accessed via this NPR report. The report goes on to search for the reasons for this huge increase, providing three hypotheses:

1. Companies have grown larger and more complex. So a single executive can have a bigger impact on profits. Therefore, it's rational for companies to pay executives a lot more.

2. A shift toward paying execs with stock options means that the value of their pay packages can shoot way up when the stock market rises.
3. "Weaknesses in corporate governance have enabled corporate executives to overpay themselves." In other words, it's not rational for companies to pay executives so much.

When Rick Perry announced his 20% flat tax yesterday, which experts say will be a boon for the rich, he said, "We need a tax code that unleashes growth instead of preventing it; that promotes fairness, not class warfare." Also after Obama's proposal in September to increase taxes on the wealthiest of Americans republicans cried class warfare - Paul D Ryan said on Fox News that "Class warfare may make for really good politics, but it makes for rotten economics." However, Republicans have made the case for taxing the poor more strictly because they benefit from the services provided by taxes. This gets to a new political strategy: to antagonize the poor. This gives poor people a lot of reason to feel defensive. That's because the poor "moocher" class just takes and gives nothing back. And the hatred of the poor runs so deep that some of the crowd at a Republican presidential debate shouts "Yeah!" when a candidate is asked if an uninsured sick man should be allowed to die untreated, or cheer when a candidate says that the jobless are at fault for not being rich.




Do you see the problem here? If you want to tax the wealthy it's class warfare, but if you want to tax the poor it's politics as it should be. As I mentioned in an earlier post, John Stewart did a great job highlighting this disgusting hypocrisy.

Reading about Rick Perry's 20% flat tax plan made me think about Republicans' fear of class warfare. Sure, there's Occupy Wall Street, which is seen as class warfare (Fox News is slandering the movement by associating it with the misunderstood organization ACORN). It's certainly a class struggle - people are holding signs that say "Tax the rich" and chanting "Banks got bailed out! We got sold out!" But it's not "warfare" because the movement has been largely non-violent (I know, I'm writing this on the same day violence broke out at Occupy Oakland, which is still much less destructive than the Tea Party's form of economic protest in my opinion).

So I believe that while Republicans - and, indeed, the super wealthy - are afraid of "class warfare" in the form of tougher regulations on business and higher taxes, many Americans feel that "class warfare" has already begun and that they are the victims. To propose taxing the poorest in America and then turning around to say you want to avoid class warfare is idiotic and transparent: once again, we see that the Republican candidates belong to a party of the rich and will do absolutely nothing for the poor (and, just to add, Democrats are better by only the tiniest bit).

And the proposed tax hike on the poor won't even do much to ease the country's budget woes, as John Stewart pointed out. The anti-poor rhetoric is not only hateful but untrue and economically unsound and immoral, so unless the candidates and their followers are completely misinformed and can't think for themselves, its only purpose would be to rile them up. In other words, incite class warfare.

I would like to leave you with another chart from the CBO report detailing the federal taxes as they relate to different income groups:

You can see the large decreases in taxes during the Reagan era, mostly benefiting the top 1% of Americans, benefiting the 21%-80% income group a small amount, and actually increasing for the poor. The tax returned to its pre-Reagan levels for the the rich from 1993-1997, although in this time the lowest quintile actually saw a decrease in taxes and the 21%-80% income group remained about the same. This is also the time when Clinton's administration famously balanced the budget. Then after 2000 when the Bush era tax cuts started coming in, the US government returned to tremendous debt. Now, I know correlation isn't the same as causation, but I don't think these correlations are coincidences. And I'm sure that the government's financial problems can't be solved by taxing people who can't afford it.