It has long been said that numbers never lie - however - they can be distorted by those who wish to cherry-pick their numbers. Of course, they are talking about federal income taxes to the exclusion of all else.
Over the last 10 years - I have fallen from the upper-middle class to the lower middle class and am pushing into the realm of the working poor faster than I would like to admit. However, my tax bite overall has INCREASED not decreased - even as the bite from federal income taxes has gone down.
Trickle Down Economics....
George HERBERT Walker Bush in a moment of unabashed candor called trickle-down theory "Voodoo Economics". He was correct but was forced to change his moderate tone to appease the increasingly radical conservative element in his party. The idea was that by lowering federal taxes on the wealthy and big business that this would create more employment opportunities for middle America and the benefits would "trickle down" to everyone. In the 1980s I took a course in political science where the professor shook his head and said that the wealthy were more inclined to "take the money and run". He was correct. In the end, nothing trickled down - not so much as a drop of the benefits the wealthy enjoyed from this "experiment".
Trickle Down Taxes...
What did continue to trickle down were federal mandates for state and local governments while federal support of said mandates dried "because of the budget deficit." This forced state and local governments to increase taxes significantly. And....unlike federal taxes - state, local, and property taxes are mostly regressive. The obvious impact was that the overall taxation on the middle class increased dramatically - particularly with respect to property taxes and rent (because the landlord had to pay the increased tax bite).
A tax by any other name....
You can argue about taxes being lower for the middle class and the few so-called "lucky duckies" that pay no federal tax - but the truth is that the bottom half of the country is paying more taxes than ever...
There are...
- Payroll taxes
- Sales taxes
- Gasoline taxes
- Property taxes
- State taxes
- County taxes
- Local taxes
- Taxes for the self-employed
and so much more.... The trouble with these types of taxes is that they fall disproportionately on people at the lower end of the food chain. For myself - my property taxes have soared 150% in the past 14 years. It doesn't matter that I'm paying less in federal taxes because - because each year I fork out more and more to my local, county and state government.
The merely well-heeled are not truly wealthy anymore...
This distortion of fact works its magic on the lower echelons of the upper classes. The reason for this is that they are singled out as having more than their fair share - but it doesn't feel that way to them. This is an added burden that the Robber Baron economy has placed on society. A family in the New York tri-state area is doing well - but they are far from cry from the security that true wealth generally brings. The irony is that they have more in common with the lower middle class than the truly wealthy. This blurs the issue for them since they too are being told they have to "pay their fair share." Some of them "get" what is happening and understand why they need to up their federal share in order to stop the bleed on the local level. For others - it's a hard sell. So I do understand where my friend was coming from. Their progress came from hard work and they feel it could be knocked out from under them in a blink of an eye
Sadly - this situation is cannon fodder for an internal middle class - class war - where everyone making from $30k - $500k a year are fighting over the scraps while those making over $1 million a year are watching the fray and laugh all the way to the bank.
Meanwhile - we are all waiting for the beneficial effects of trickle down economics...After 30 years, I'm not holding my breath....
© 2011 - Ruthmarie G. Hicks - http://www.therobberbaroneconomy.com - All rights reserved.
Ruthmarie, I will repost this. As always, your insights are learning opportunities. Let me add to your premise. Our local paper just had an article that indicated our schools would be raising fees for the students. These "fees" run into a lot of money for those families and that is a de facto TAX. Schools do this because the Republicans have made it impossible to adequately fund our public schools. Ditto for college tuition which has risen so sharply higher education has become an impossibility without accruing massive debt. THAT IS ALSO A TAX ON THOSE FAMILIES. Wouldn't it be better for all citizens to share that burden. Isn't that the very nature of society? Of course, we could stop making war and fund everything but that make too much damn sense.
ReplyDeleteThis is true. It is a double -whammy. Cutbacks result in foisting additional costs on the "end-user" in this case the parents and the kids. The other issues is that the federal government is very good at issuing "unfunded mandates". This is particularly important when the federal government KEEPS CUTTING. This is a lesson in Keynesian economic theory - squeezing people of limited means during a severe recession a recipe for a depression.
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