Don’t Let ‘Em Play the ‘Class Warfare’ Card
Rethugs, many trained by Newt Gingrich, have mastered the art of Orwellian double-speak. ‘Death Tax’, ‘Reaganomics’, and the like. They have used these terms in large part to turn the tax code on its head through Kemp/Roth and the Bush tax cuts for the wealthy while misleading the public with verbal sleight-of-hand.
President Obama, starting tonight, is likely to call for steps to rebalance tax inequity. You can be assured that the lemmings of the right will have their talking points ready to go, and that “…the President is waging class warfare” will be Numero Uno on their list.
Let El Somnambulo give you a taste of what class warfare is really all about. It’s been going on for over 20 years.
For those with ADD, the Beast Who Slumbers will provide you with some choice nuggets from the linked Christian Science Monitor article:
“As recent IRS data show, these elites are paying less in taxes – much less – than their deep-pocket counterparts used to pay. In 2006, the 400 highest-income Americans together reported $105 billion in income, an average of $263 million each.
Having trouble visualizing that? To pocket $263 million a year, you would have to take home over $60,000 an hour – and work 12 hours a day, seven days a week, for an entire 12 months. Sounds tiring, doesn’t it? But most of the top 400 make their fortunes buying and selling assets, everything from stocks and bonds to the exotic paper that helped inflate the housing bubble.
Uncle Sam taxes income from those assets – whether that income be capital gains or dividends – at a much lower rate than income from work.
The current top tax rate on “ordinary” work income sits at 35 percent. But dividends and capital gains from the buying and selling of most assets face only a 15 percent top rate. That’s why in 2006, America’s top 400 paid just 17.2 percent of their $263 million average incomes in federal tax.
Millions of middle-class American families, once you tally income and payroll taxes, pay far more of their incomes in tax. One particularly striking example from billionaire investor Warren Buffett: In 2006, he paid 17.7 percent of his income in total taxes. His secretary, who made $60,000, paid 30 percent of hers.”
So the next time El Burrito Junior and the other silverspoonistas scream ‘class warfare’, ask them what they have done to level the playing field since the days of the Gipper. Class warfare is what they’re all about, and they’ve been winning b/c the dice have been loaded. Time for some new dice.
Tags: Obama
lemmings
can lemmings wear Blue Glasses or own failed radio stations?
The investor class enjoys the rich man’s tax rate of 15%, which is the tax rate for capital gains and dividends. And the Social Security and Medicare/Medicaid tax on that income is zero-point-zero percent.
True, they aren’t getting much capital gains this year. But they don’t care, because they don’t have to sell their stocks this year. After all, they are rich.
They would like you to believe that they are paying 39%, which is the top marginal rate for wages. But if you make that much money, your accountant will insist that you diversify out of wages to minimize your tax exposure.
Which explains why the banks were crying about a $500k pay cap – they are rich, but they would prefer to not sell their stocks this year in a down market. They’d rather have cash to finance their >$500K lifestyles.
You, on the other hand, if you want to survive you must sell off your 401(k) in this down market. And the bank executive will use his TARP bonus t0 buy up your 401(k) shares at pennies on the dollar.
Meanwhile, your wage taxes (Social Security and Medicare/Medicaid) are 15-point something percent, while the investors pay zero point zero.
They will tell you that the employer pays half the wage tax, as if the tax is not passed on to the employee in the form of wage cuts.
Remember, these are the same people who argue that corporate taxes are passed on to the consumer, so it follows that the employee share of wage tax is passed on to the employee.
A little OT, but today’s news is “Bank of America Corp. Chief Executive Ken Lewis is reassuring employees that his company is not discussing a larger U.S. stake with the government.”
Now this is interesting, because last Friday morning the buzz was very much that B0fA and Citi were going to be nationalized or parceled out over the weekend.
I think what happened is that BofA and Citi were very much interested in getting huge slugs of taxpayer money. But when Obama held firm on slapping some *conditions* on the money, the banks choked and started a PR campaign against “nationalization.”
That’s two great posts in a row, anon.
It is also interesting that BoA is rolling out all of these assurances just as the “stress tests” are supposed to begin. Of course, the campaign against “nationalization” is a campaign against semantics. If these banks are dead, receivership is still the better part of valor. Close to 40 banks have been “nationalized” since January 2008 in exactly this same way.
I hope people start talking about this more. Our taxation system is very regressive and out-of-whack. I highly recommend David Cay Johnson’s book on this subject.
Reaganomics rewards wealth but not work. I’ve had discussions about this with several people who have been spoonfed Republican talking points all their lives and suddenly a lightbulb begins to go off in their heads. I wonder sometimes if Republicans realize that the 1950s that they seem so fond of (where many could afford a house and a middle class lifestyle with one income) had very high taxation levels on the rich (I believe 90% at one point). At that time CEOs only made about 40x what the average worker made.
Now, I don’t necessarily think we should go back to that but we do need to rethink our tax system.
“Preprivatization” Cassandra.
Unleveling the playing field is the key strategy by the Reagan trickle-downers. It turned out to be truly VooDoo Economics — with middle class and working class people serving as the sacrifices to Reaganite orishas.
I agree Cassandra and ‘Bulo that the big success of Republicans was stiffing the middle class while convincing them that it was helping them. It’s quite amazing, really.
The genius bit of Reagan-era economic discussion is that they convinced many working class and middle class people that Republican policies were aspirational — and that paying the tax freight of wealthier people is part of the price in preserving the possibility of upward mobility to the lesser-taxed class.
In the Republican dialectic, the rich are the oppressed working class who are the producers in this economy and must be protected and coddled for our survival.
This is a terrific thread, tying together the whole story.
I have long wondered why these facts have never been fully aired then digested by those millions who have been cheated by these regressive tax policies.
Most recently, the housing bubble has served to deceive the middle and poor into thinking that they could get rich quickly.
Now the truth is becoming more obvious to the victims of the GOP myth.