My Parents got thru the Depression with a progressive income tax, we won WW2 with progressive taxes

[FogerRox]

The 12 million men & woman that served in the military in WW2 came home, the GI Bill sent vets to college, and they started families. This created the largest, most vigorous and the best educated middle class, in the history of the planet. Labor unions were at the zenith of their power, our eductaional institutions were the envy of the world, corporations made money, the wealthiest made money. The American Dream was born.

A Middle class is a rare thing, occurring only 3 times thru-out history. The first rising of a middle class occurred as a result of the Black Plague. The Black Plague killed about 30 to 50% of the worlds population, creating a labor shortage. This allowed that Trades & Craftsman to command a higher wage, which trickled down to the common yeoman, much as the unionization of US labor in the middle 1900's allowed non union labor to command wages akin to union labor. Some have written that the Renaissance, without a middle class that had the leisure time to even consider art & music, let alone the time to paint, sculpt, write & perform music, would have never occurred.

The second rising of a middle class occurred in the US colonies in the middle 1700's. Once a few Indians were driven away from an area, there was free land available for farming. In an agrarian society this was a big deal in that you could own your own land, grow & sell your own crops & keep the profits, much as a family owned business does today. One could take care of its own.

The third rising of a middle class occurred during the Great Republican Depression of the early 1930's. FDR's New Deal brought forward tax progressivity, as well as labor rights earned thru the union movement, such as the Child Labor laws passed in 1937 & 1938, as well as Education rights under the GI Bill, for returning Vets.

The real point of progressive taxation is not producing more tax revenues, the point is having a large and vigorous middle class that can participate as citizen legislators,& send its kids to college, so those kids can invent lots of cool stuff for the corporations to make money off of. Consider kids as assets. How do you make best use of those assets? Educate those assets of course. Regressive taxation taxes the Middle and Working classes out of the economy, Progressive taxation engages the Middle and Working classes in the economy and are better to take care of their own. This means a more stable family.

Enter Ronald Reagan and the start of full spectrum warfare on the middle class. The opening salvo, the PATCO strike. Busting the Air Traffic Controllers union was the start of a multi front military style operation to drive wages down for all Americans. Then we were told that Social Security was going broke, this represents the opening of a second front of the War on the Middle Class that resulted in the doubling of payroll taxes.

[Melissa G]

1. With the notable exception of a rather cavalier attitude

towards the 'white manifest destiny' land grab from native people (not to mention the slaughter from the wars that surrounded that land grab...) a pretty good rant.
mg

[FogerRox]

3. I see you got my point

(not to mention the slaughter from the wars that surrounded that land grab...)

Its a literary vehicle, by not drawing attention to the point, someone, A thinking Person will think of the wars, so in essence I did bring it to attention.

Thanks too.

EDIT: The Plague mention was meant in the same vein.

[FogerRox]

2. Plus the increased disparity between the rich and poor

[Wilms]

4. .

http://www.thewe.cc/thewei/_/images11/us_rich_scandal/income_inequality_us.jpe

[FogerRox]

5. Ouhhhhhh thats a pretty one, may I steal it ?

[FogerRox]

6. Afternoon kickin

[Political Heretic]

7. Your graph is misleading.

:hi:

A bit of a sensationalist title to my post, because its only worse than your graph accounts for.

It gets the corporate and income tax rates correct, technically. But nothing is a true picture unless you account for what corporations and top income earners actually pay.

According to a 2004 GAO report (please don't make me find it, because I CAN, I just don't want to do the work) 61% of US based corporations paid ZERO in taxes. And the average tax rate for the remaining corporations was not the 35% standard - after every break, loophole, and sidestep that has been injected into tax codes, the average was something like 11%. It was lower than the average the middle class pays.

The same thing is true with the top 5% of income earners in the country. Instead of 35%, they paid on average something dramatically less (11% figure comes to my head, but I don't believe it was the same as the average corporate rate, and I don't have the report in front of me). Also below what the average middle class pays.

Really, that's all the information a person needs to understand that something is very, very wrong with the economic structure of our country, and all the information needed to understand why we are heading further and further into deep financial trouble.

[FogerRox]

9. effective rates

Middle class pays about 17%, the richest 16%, working poor 15%, roughly speaking.

What we have now is regressive in nature, 180 degrees off course.

[Political Heretic]

10. Thank you - that sounds right for income. It was corporate that was 11%

effective, in 2004. Or actually, to be totally accurate, the report was written in 2004, the data itself could have been from 2003.

[Selatius]

8. Most wealthy people don't make their money on payroll income but on investment income.

The top rate for capital gains taxes is only 15%. This basically means labor is taxed more heavily than capital even though, to paraphrase Lincoln, labor is the superior to capital. Without labor, the capital is nothing.

[truedelphi]

11. What a great discussion

The notion of a middle class is indeed rare.

And it is a notin going underground - with only Lou Dobbs and Bill Moyers even speaking about it on TV.

I often wonder what to make of the current situation in Singapore - where almost 72% of the people now own their own homes. (or a similar number) You can't chew gum in public without risking a flogging, but the jobs that our inudstrialists have sent there have seemed to bring about a middle class society.

As far as the agrarian class in North America and its burst of middle class prosperity, I was reading "Bury My Heart at Wounded Knee" last night, and one of the Native Americans whose relatives survived WOunded Knee was saying that by 1905 the Native Americans were coming along very nicely as far as being farmers. And that they also hunted and enjoyed that.

This pissed off the Administrators of the Bureau of Indian Affairs so much that they convinced the people to sell of their land during WWI (for the sake of the troops fighting in Europe) and the Native American's lot in the Dakotas began its downward spiral.