Whence the Middle Class August 31, 2011March 24, 2017 TAX THE POOR Stephen N.: “The lower class of income earners pay far less than their fair share of taxes. They should be taxed more.” DISCRETIONARY INCOME Barry: “Manish Bhatia didn’t quite have the right facts yesterday, though I agree with the sentiments. In 2008, the top 10% earned 46% of income and paid 70% of taxes – which is okay by me, but not by the ultra right. Here are some tables that will keep us from being labeled liars.” ☞ Helpful, except you missed one key word in Manish’s post: discretionary. (You may have missed this because it wasn’t there.* Now it is.) Discretionary income is what folks have left after the necessities have been paid for – basic food and shelter, shoes, the utility bill. Most people have relatively little discretionary income . . . even after working all day at jobs the wealthy want done but would rather not do themselves. For those at the top, most of their income is discretionary. “Well, tough,” some people will argue: “Low-income folks should live in the street, if need be, or malnourish their children (or proffer them for adoption), before we ask the best off to pay Reagan-era taxes on capital gains or Clinton-era taxes on income.” I am not one of those people. And, in fairness, I don’t think anyone thinks he is one of those people. Yet aren’t those who call for “tax cuts on the job creators” and a cut off of unemployment benefits – and other cuts to the social safety net – arguing just that? Somehow they manage to keep from allowing themselves to connect the dots. But that’s what they’re arguing: that the busboy who clears the dishes at their country club has it too easy. That if he should someday need Social Security (that Rick Perry wants to dismantle), tough. He should just get rich and join his own country club, as they did. I see it differently. I’d prefer to see no tax levied on the first dollars one earns that cover the costs of basic food and shelter (nothing fancy, but, yes, a refrigerator, too, and the electricity it takes to run it, and other such things); but then some reasonable graduated income tax on the remainder. Which was pretty much what we had under Clinton when we balanced the budget and created 23 million new jobs. *The original post said “disposable” income, which actually means all after-tax income. UNLEASH THE PLAGUE Karen Tiede: “Re Sarah’s note yesterday: ‘And it is important to point out that if [my best friend, the low-paid nursing-home worker] and many people just like her were to disappear, lots of very rich people would suffer. And there is great likelihood that they would suffer physically. Something to think about.’ Essentially, this is what happened in Europe as a result of the plague. Poor people died and there was no-one to do the physical labor that made the wealth flow to the people who owned the land that made them wealthy. Enter the middle class: a direct consequence of the transfer of power that happened when lots and lots of poor people died from the plague. From Wikipedia: In Western Europe, the sudden shortage of cheap labour provided an incentive for landlords to compete for peasants with wages and freedoms, an innovation that, some argue, represents the roots of capitalism, and the resulting social upheaval “caused” the Renaissance, and even the Reformation. In many ways the Black Death and its aftermath improved the situation of surviving peasants, notably by the end of the 15th century. In Western Europe, labourers gained more power and were more in demand because of the shortage of labour. In gaining more power, workers following the Black Death often moved away from annual contracts in favour of taking on successive temporary jobs that offered higher wages.[21] Workers such as servants now had the opportunity to leave their current employment to seek better-paying, more attractive positions in areas previously off limits to them.[21] ☞ Short of unleashing the plague, what would you say to things like child-labor laws and the 40-hour work week and “weekends,” which tighten the supply of worker-hours? What would you say to reasonable minimum-wage laws and a social safety net and collective bargaining and a progressive income tax and an inheritance tax? If you were a modern day Republican – the Governor of Wisconsin, for example – you would say: a pox on such things. They just interfere with the free market and impede the glorious work of the job creators.