Time for working class to take a stand on taxes

Taxes2

Taxation has become a hot-button issue, but it is one that working-class folks need to get involved in.

As complex as tax issues are, perhaps we can use a bit of statistical shorthand to get a general overview of where we have been and where we might be headed.

In 1960 the federal tax rate on the top bracket for the highest incomes was 91 percent, according to an article in the Journal of Economic Perspectives* By 1988 the rate had fallen to 39.6 percent. In 1993 the highest incomes were taxed at a rate of 39.6 percent. The rate was lowered again in 2003 to 35 percent.
Corporate income tax also has been slashed in the last 50 years from around 3.5 percent to 4.0 percent of GDP in the 1960s to less than 2 percent of GDP in the early part of the 21st century.

It is apparent that the tax burden on wealthy individuals and corporations has declined dramatically in the last 40-plus years. From Reagan's implementation of Milton Friedman's economic slash-and-burn "trickle down" theories, through Clinton's end of "welfare as we know it" and the implementation of NAFTA, to George W. Bush's tax cuts for the wealthiest Americans, we have seen the executive branch of the U.S. government preside over a systematic dismantling of the gains won by working people in the early 20th century.

The debate around tax policy is the right place for working class people to take a stand. The capitalist class, through their bought-and-paid-for political surrogates, has been looting the wealth produced by working people for decades. It's time to take it all back.  

* All statistics are from the Journal of Economic Perspectives, Vol 21 Number 1 winter 2007, "How Progressive is the US Federal Tax System? A Historical and International Perspective," Piketty and Saez.

Photo: GenBug CC 2.0

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  • Note, though, that a simple "tax the rich" perspective - even if done to protect programs fundamentally in the working-class interest - fundamentally fails to shift the debate, because it falls in line with the "big spending" perspective. Taxes which historically were introduced as taxes on the rich are warped over time to tax the working class - the example in the article of the income tax is a perfect one.

    Instead, it is important to clearly identify the burden shift that has occurred (which, honestly, is very difficult and requires closer analysis than has so far been done), and propose a shift back *without a net tax increase*.

    IMO, only this will get us clear of the "tax-and-spend" trap that makes many working-class voters so wary of supporting "tax the rich" strategies.

    Posted by followingsylvis, 03/07/2011 2:04pm (3 years ago)

  • Great article, Bob. It's time to make political hay out of the transfer of the tax burden from the wealthy and the corporations to the so-called "middle class," i.e., the working class. There are some incisive statistics on this, showing how the percentage of total tax revenue paid by the upper echelons has fallen while that paid by the rest of us has risen, but I can't put my hand on them right now. Does someone know a source for this? In any event, we on the left need to make sure that "tax the rich" becomes part of today's political discourse.

    Posted by Hank Millstein, 03/06/2011 11:55am (3 years ago)

  • an excellent article. historically labor, communists, socialists were solid on the issue of taxation. in recent years there has been no policy or a weak one and we have allowed the corporations and their front men to do the talking and defining. (tea party for example) the tax burden on the working class is enormous. income tax, sales tax, gas tax, tax on your house, etc. the solution was to vote for another increase in millage or a penny in sales tax etc. to finance schools etc. thus further dividing the working class. one of the big battles in the clinton era was raising the maximum tax rate from 35 % to 39.6 %. another area of unfair taxation is the cap on social security ($106,800) which lets bill gates warren buffet and the infamous koch brothers and other billionaires not pay their full share. in soidarity jim

    Posted by jim, 03/04/2011 4:26pm (3 years ago)

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