Saturday, April 18, 2009

Article Of The Week

The "tea bag" parties of April 15 provoked much ridicule and insufficient analysis by the mainstream media, especially given that, according to fivethirtyeight.com, approximately 311,460 individuals fanned out amongst 346 locations. Apparently, hundreds of thousands of Americans are angry at high taxes and the president who is forcing a tax cut upon them, and at a big, powerful government that enabled Wall Street to rig the system against the middle class.

Though claiming to be non-partisan which, depending on the locale may have been largely true or blatantly false, sentiment and speeches reflected a great deal of Repub gospel. Blogger Jon Perr of PERRspectives.com on April 15 eviscerated ten GOP "Tax Day lies." They are:

1. President Obama will raise taxes on small businesses.
2. The estate tax devastates small businesses and family farms.
3. 40% of Americans pay no taxes.
4. Tax cuts always increase revenue.
5. The GOP is the party of fiscal discipline.
6. Ronald Reagan was the greatest tax cutter of all time.
7. FDR caused the Great Depression, or at least made it worse.
8. Obama's cap-and-trade plan will cost each American family $3,100 a year.
9. Obama's tax proposals will undermine charitable giving.
10.The rich pay too much in taxes already.

Among my favorite myths is #6. Republicans apparently forget not only that President Reagan presided over a budget deficit greater in relation to GDP than did President George W. Bush, but responded to huge deficits by twice raising taxes. It is part of the narrative- critical to maintaining the legitimacy of their ideology- the GOP is creating that President Reagan was a true conservative while President George W. Bush deviated significantly from conservative orthodoxy. Though both Presidents were conservative, Reagan was far more pragmatic, with Bush taking a harder-edged, more dogmatic and conservative, approach.

Myths #3 and its corollary, #10, are a major part of the talking points of conservative radio these days. Rush Limbaugh, especially, argues that a great many Americans pay no taxes and, hence, the wealthy pay too much. But as Perr notes, "virtually all American workers pay the 6.2% Social Security tax (on income up to $97,000) and another 1.45% for Medicare" and most taxpayers pay more in these payroll taxes than in income taxes. And that's without considering sales and excise taxes, which also generally are regressive and paid by almost everyone.

And the skewing of the tax system toward the wealthy and against the middle class has had an unintended- or maybe intended- effect. Citing data compiled on the period of 1979-2006 by the Congressional Budget Office, The Center on Budget and Policy Priorities noted "the share of national after-tax income going to the top 1 percent of households more than doubled between 1979 and 2006, rising from 7.5 percent to 16.3 percent." There is now (at least before the 2008 stock market dive) greater concentration of income at the top than at any time since 1929. The Center summarizes

the top 1 percent of households had a larger share of the nation’s after-tax income, and the middle and bottom fifths of households had smaller shares, than in any year since 1979, the first year the CBO data cover. As a result, the gaps in after-tax incomes between households in the top 1 percent and those in the middle and bottom fifths were the widest on record.

Barack Obama promises to wind down the war in Iraq. He is willing to take on the terrorist threat in the border region of Afghanistan and Pakistan largely ignored by his predecessor. The economic downturn because of, or despite, the President's policies will be arrested. Even America's racial divisions may (but probably won't) be partially healed with the election and leadership of our first minority president. But one of the enduring characteristics of American society, the (usually growing) gap between the wealthy and the rest of our national community, lives on.

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