By William Muller, Contributor
Republicans who’ve shuddered at the notion of raising taxes on the super rich and cried foul with accusations of ‘class warfare’ have ignored the steady disintegration of the American middle class and the ever-increasing divide between rich and poor.
The top one percent of income earners owns approximately 34.5 percent of the national wealth, and the top 19 percent own 50.5 percent, according to Edward N. Wolff, professor of economics at New York University. Meanwhile, just 15 percent is in the hands of 80 percent of the population.
Internal Revenue Service records from 1992 tracking the 400 highest gross incomes show the tax rate for the super rich has plummeted from 26 percent to 17 percent, according to an April 17 article in USA Today. Over this same period, the average income tax rate for all taxpayers decreased from 9.9 to 9.3 percent.
From 1979 to 2007, after-tax income for the top one percent has risen 281 percent, more than triple the average gained by the middle and lower-income classes, according to a study by the Congressional Budget Office.
This tremendous transfer of wealth from the poorest to the richest members of society over the last three decades has been a brutal form of class warfare. It’s shifting the burden of taxation down the income ladder with the cynical argument that easing tax burdens on the wealthy enriches everyone else lower on the totem pole in a form of ‘trickle-down prosperity.’
With tens of millions of dollars spent on aggressive lobbying and a bit of creative accounting, many corporations are able to minimize or – in the case of multi-national conglomerate General Electric – avoid paying taxes altogether in 2010 and still claim a hefty $3.2 billion tax credit.
President Obama has named none other than General Electric chief executive Jeffrey Immelt as chairman of the president’s ‘jobs council,’ according to the New York Times. His job is to facilitate discussion in reworking federal tax policy to reduce loopholes and slash tax rates for multi-national corporations. Only in a plutocracy would this glaring conflict of interest go largely unquestioned.
The issue of the deficit involves not only taxes, but also spending. While health care, infrastructure and social services have been targeted for cuts, the military budget has been untouched by both parties.
It’s ludicrous that in the middle of the worst economic crisis since the Great Depression, with high unemployment and rising consumer prices, more than 30 percent of the federal budget was spent on the military in the fiscal year 2010. Such spending is only expected to increase year after year.
In just one decade, the occupations of Iraq and Afghanistan have cost over $1.6 trillion and rising. Obama’s new war in Libya promises to exacerbate the situation even more.
Several nationwide polls show the vast majority of Americans support a return to pre-Bush tax cut levels for the rich and a reduction in military spending as a good start to shoring up the deficit.
It’s time everyone paid their fair share. That includes the wealthy and powerful.