Wednesday, July 14, 2004

Class Warfare

I don't have the smarts or the patience to write lengthy intelligent posts, but fortunately Billmon at The Whiskey Bar does. This one on class warfare is a must read.

I'm known to launch into long rants about why the middle class in this country has not revolted. My theory is that its because of three factors: easy credit (which allows the middle class to maintain its lifestyle even when income is down and the quantity and quality of jobs has deteroriated), racism (which leads people to believe that their tax dollars are going to fat black women churning out thugs in the ghetto) and religion (which diverts the middle class from what's being done to them economically to so-called "values" issues like gay marriage and abortion).

Look at the numbers: (from Winning Argument)

* 257,000 taxpayers with incomes of more than $1 million received a bigger combined tax cut than the 85 million taxpayers who make up the bottom 60 percent of the population.

* Real wages are still shrinking. Although weekly wages appeared to grow .3% in the month of May, adjusting for inflation yields a wage decline of .4% in May, and.5% during the last year. On average, then, it has become more difficult for people to afford goods and services.

* Healthcare costs are rising. Annual employer-based health insurance premiums have risen 37% for individuals and 41% for families since 2000. Out-of-pocket costs associated with these plans are up 52% for individuals and 49% for families during the same period. Almost 20% of household personal income now goes towards healthcare costs.

And from the old Calpundit (Kevin Drum) blog:
The figures below, which are adjusted for inflation, show household incomes since 1967.

Top 5% Households
1967 $82,000
2000 $150,000

Median Households
1967 $37,000
2000 $42,000

If median incomes had increased at the same rate as those of the top 5%, the median household income in America today would be $56,000. In reality, it's only $42,000. This difference of $14,000 should be dubbed the "Republican Income Gap."

Tax Rates

Median Family 5.3%
Top 1% 76.9%

Median Family 24.63%
Top 1% 26.7%

Also, "...if the standard personal exemption had kept up with inflation since 1948, it would be $12,941 today. In reality, it's only $3,000...For the middle class, the standard exemption has decreased significantly while payroll taxes have increased. For the rich, the top marginal rate has plummeted, the estate tax has been eliminated, and rates have been halved on capital gains...this has been accompanied by steady declines in both economic growth rates and labor productivity."

Kevin concludes
"A vigorous and growing middle class is essential to the health of a nation, and ours has been mostly stagnant for the past 30 years. One of these days the middle class is going to learn just how rich the rich really are and just how little of our country's enormous prosperity ever "trickles down" to them. But when?"


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