Class war #2

Paul Krugman's New York Times column today backs up Elizabeth Warren's rebuttal to the Republican charges of Obama's plan to increase taxes on the wealthy as "class warfare."

From 1979 to 2005, the last stats available from the Congressional Budget Office, inflation-adjusted family incomes in the middle income group rose 21%. For 26 years, that's not quite 1% a year. For the same period, income of the top group rose 480%, from $4.2 million to $24.3 million. Do the math: that's 18.4% per year.

Do they look like victims of class warfare? Krugman asks.

So what are the real class warfare tactics that have gone on during this period that have tilted the income shift toward the wealthy? Attacks on organized labor and collective bargaining for wages, plus deregulation of financial institutions and corporations. And most important, taxes on capital gains and estates have been slashed, while payroll taxes have gone up.

This is what creates what Warren Buffet has made such an issue over: he pays a lower rate of taxes than his secretary. One-fourth of those with incomes over $1 million a year pay a total tax rate (income plus payroll) of 12.6 % -- which is lower than many in the middle class.

So what planet do Paul Ryan and Eric Cantor live on? They rightly claim that the wealthy are paying more taxes now than they did and a larger portion of the total tax revenue. That's true.

But here's why: these wealthy people are making a lot more money than they did before -- and a larger share of the income pie, with 480% increase. Of course, they owe more taxes.

We are in an era of the cherry-picked sound bites without any explanation of the larger picture. And Republicans have perfected the art of selling misleading information and inducing their constituents to vote against their own best interests. Now they've got all these middle-class Tea Party zealots drooling to install a Republican president and Congress -- who will deregulate corporations and banks and cut taxes to benefit the rich and further hurt the middle class.

Is that what they want? Do they have an inkling of the results? More of the same that got us into this financial crisis.

Bah, humbug. A plague upon them.

Ralph