By Paul Krugman, New York Times, September 22, 2011
Detailed estimates from the (U.S.) Congressional Budget Office — which only go up to 2005, but the basic picture surely hasn’t changed — show that between 1979 and 2005 the inflation-adjusted income of families in the middle of the income distribution rose 21 percent. That’s growth, but it’s slow, especially compared with the 100 percent rise in median income over a generation after World War II.
Meanwhile, over the same period, the income of the very rich, the top 100th of 1 percent of the income distribution, rose by 480 percent. No, that isn’t a misprint. In 2005 dollars, the average annual income of that group rose from $4.2 million to $24.3 million.
So do the wealthy look to you like the victims of class warfare?...
What we know for sure... is that policy has consistently tilted to the advantage of the wealthy as opposed to the middle class.
Some of the most important aspects of that tilt involved such things as the sustained attack on organized labor and financial deregulation, which created huge fortunes even as it paved the way for economic disaster.
The budget office’s numbers show that the federal tax burden has fallen for all income classes, which itself runs counter to the rhetoric you hear from the usual suspects. But that burden has fallen much more, as a percentage of income, for the wealthy. Partly this reflects big cuts in top income tax rates, but, beyond that, there has been a major shift of taxation away from wealth and toward work: tax rates on corporate profits, capital gains and dividends have all fallen, while the payroll tax — the main tax paid by most workers — has gone up.
And one consequence of the shift of taxation away from wealth and toward work is the creation of many situations in which — just as Warren Buffett and Mr. Obama say — people with multimillion-dollar incomes, who typically derive much of that income from capital gains and other sources that face low taxes, end up paying a lower overall tax rate than middle-class workers. And we’re not talking about a few exceptional cases....
According to new estimates by the nonpartisan Tax Policy Center, one-fourth of those with incomes of more than $1 million a year pay income and payroll tax of 12.6 percent of their income or less, putting their tax burden below that of many in the middle class....
Elizabeth Warren, the financial reformer who is now running for the United States Senate in Massachusetts, recently made some eloquent remarks to this effect that are, rightly, getting a lot of attention. “There is nobody in this country who got rich on his own. Nobody,” she declared, pointing out that the rich can only get rich thanks to the “social contract” that provides a decent, functioning society in which they can prosper.
Crying "class war," by the "right" whenever the idea of raising taxes on the wealthy is mentioned, is another example of a kind of reductionism that afflicts all those who refuse to deal openly and honestly with the facts. They skew those facts, often with highly inflamable 'hot button' language to arouse the fears among their base voters, and in the process, distort the debate.
It is far easier to "shoot" verbal bullets, without nuance and without regard to the actual complex realities, than it is to debate those same complexities. And, in many ways, it satisfies the media who want a lot of competing bullets in order to generate controversy, and that vehicle essentially negates a healthy political debate.
The voters are, by this process, reduced to little more than adolescents stomping their feet in a high school gymnasium whenever the name of their favourite candidate is mentioned from the stage or the microphone.
Those who drink the kool-aid being offered by the Tea Party have joined a movement, as part of their misuided exercise in citizenship. Unfortunately, grapping messily with the incorrigible and often distaseteful facts is left to those editorial writers, and political professionals whose task it is to integrate those messy facts into some coherent theme, so that ordinary readers/citizens/voters can make some meaningful judgement based on those facts.
Not only is the 'right' disdainful of education, learning and basing their policy proposals on those realities, but the very vehicle they use for their propaganda campaign is bereft of nuance, of agreed facts and thereby, the cornerstone of legitimate political debate.
It is quite literally impossible to debate with "bullets", and with one-word answers, like the list of adjectives hurdled indiscriminately at President Obama, this week by Republican candiate Rick Perry.