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The Middle Class Squeeze Is A Result Of LOW Taxes

by: davej

Fri Apr 25, 2008 at 19:33:09 PM PDT


By Dave Johnson, Speak Out California

It is a popular misconception that taxes add to the squeeze on the middle class.  But it isn't tax increases that have squeezed the middle class, it's tax cuts.  It may be hard to believe (after so many years of constant anti-tax rhetoric) but here is why.

davej :: The Middle Class Squeeze Is A Result Of LOW Taxes
The middle class IS squeezed these days.  There are pressures and long hours at work, long commutes, health insurance costs, housing costs, food and gas prices rising, and wages are not keeping up -- they haven't been for a long time.  But it is not a coincidence that the middle-class squeeze began at the same time as the corporate-funded anti-government, tax-cutting fervor.  In fact a good case can be made that many of the reasons the middle class feels squeezed are the result of pressures brought about almost entirely FROM the effects of tax CUTS and cutbacks in government services, regulations and enforcement that went along with the tax cuts.

There are direct and indirect relationships.  One example of a direct relationship is the dramatic rise in the cost of a college education.  Sending kids to college has become extremely expensive.  And this places a very hard squeeze on parents who want their children to get a degree.  But here in California tuition was very, very low before Proposition 13.  Tax cuts directly led to this squeeze on the middle class.  (And remember, most of the property taxes that were cut were on business property.)

Indirect results include rising energy prices from cutbacks in government R&D and subsidies for oil alternatives as well as longer commutes as the government cuts back on transit solutions like buses, trains and roadbuilding or improvements.  Health care costs continue to rise because of government inaction and deregulation -- the result of the anti-government sentiment encouraged as part of the the anti-tax campaign.  And insurance costs rise while coverage is reduced or even denied as the government cuts back on regulation and enforcement. (My wife is the one who brings in the health insurance for our family.  Every year she gets a raise, but every year the amount taken out of her check to cover her portion of the health insurance payment goes up by more than her raise, and her take-home pay is lower.  So more squeeze.)

Other areas where the anti-government, anti-tax campaign has increased pressure on the average person is at work.  Anyone that works for a corporation is feeling the extra pressures there.  As government of, by and for the people declines corporate power fills the vacuum.  

And there are so many more areas where we are squeezed by this increasing dominance of corporations in our lives.  As government -- the power of We, the People -- diminishes, the corporations swoop in to pick us clean.  How many examples of corporate power coming to dominate over people power can you think of?

Click through to Speak Out California

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Drowning the middle class in Grover Norquist's Tub (8.00 / 1)
Dave,

You're making the right point, and you're making it right.  The New Deal was built on using government to expand the middle class, and to make more people able to be part of the American middle class.  Public universities, state parks, good roads and bridges that don't fall into rivers.  Without a tax base to support it, and you have none of that.

Want more affordable college tuition?  Reform Prop 13 so corporate landowners no longer get such a huge tax break.  Make sure people who buy yachts pay sales tax, so that the rest of us can enjoy state parks while the ultra rich enjoy the sea breeze.  And make sure that we are free to organize to protect our rights at work, both via unions and via the demand that the machinery of government protects people who work as well as people who own the place you work.

It's not waging class war.  It's just starting to put up a defense against forty years of class war on the middle and working classes.


I think this is exactly right (8.00 / 1)
I'd love for someone to produce a study quantifying this (maybe the California Budget Project is interested?), showing middle-class Californians just how much these tax cuts have cost them. The rising cost of gas, the rising cost of health insurance, the rising cost of education, and slow but steady hemorrhaging of good jobs are all attributable to tax cuts but putting a $ on that would be useful.

Because for many Californians, tax cuts are seen as a simple proposition - if government increases that tax, that's money they take from my wallet that never comes back to me. Few Californians see the path that money takes, they don't see how it comes back to them in the form of public services investment.

It's no coincidence that since the current tax cut wave began in 1978, California has been characterized by a generation of inequality. Until Californians associate tax cuts with a lower standard of living, we're going to have a hard time reversing these trends.

You can check out any time you like but you can never leave


UC/CSU students the victims (8.00 / 2)
I think the astronomical increase in the tuition for UC/CSU education since Prop 13 is one of its greatest penalties.  We are now so dependent on federal grants and loans that even if students do manage to find some way to afford college, they and their families are left with crushing debt loads that set them back in the early years of their careers instead of building up the down payment to pursue that great American Dream (house, car, 2 and a half kids, etc.).

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It is so disheartening (8.00 / 1)
to think that people who work so very hard still can't make ends meet.  This all makes sense to me, but it would help to quantify the exact cost to the middle class.

But education is the last place to cut at any level.  Many point to the GI Bill after WWII to the creation of the middle class boom in the fifties and sixties.  Education is never a wasted investment and if parents can't afford to send their kids to school they will face having their children lead an even harder life than they have themselves.  Who can't justify such a prospect?

Mr. Ellinorianne for CA State Senate! (Gary Pritchard ActBlue CA-SD-33)


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