Tea party and GOP: Defending indefensible tax cuts

The baffling insistence that the wealthy need more breaks

December 01, 2010|By Dan Rodricks

I heard two members of the Maryland chapter of tea party-affiliated Americans For Prosperity argue that a family making $250,000 a year is not rich, not wealthy, not even well-to-do. And besides, one of them said, why would we want to allow the federal government to take more taxes from those families when "they're the ones who are going to buy the Lexuses"?

Here's where the tea partiers miss an opportunity to dash suspicions that their movement is just refried Republican trickle-down posing as white middle-class anger: the defense of a system of wealth accumulation and grotesque income disparity that has been in place for years. Why Americans who are middle class or borderline middle class (on the low end) want to help the political-corporate class maintain huge advantages while the rest of the country struggles to get by remains one of the great psychosocial mysteries in our midst. In doing this, the tea party merely does the bidding of an establishment that wants to minimize government while extending further privileges to the privileged.

The recent history, worth repeating:

•From about the time of Ronald Reagan's election through most of the George W. Bush administration, average after-tax incomes for the top 1 percent of American households rose by 281 percent, an increase in income of $973,100 per household. That's according to the Congressional Budget Office; the analysis was adjusted for inflation.

•During the same period of time, the middle fifth of American households saw a 25 percent increase ($11,200) and the bottom fifth of American families enjoyed a whopping 16 percent increase ($2,400 per household).

•The nation has not seen such a level of income disparity since the Great Depression.

•In 1980, there was only one state, Louisiana, where it could be said that the top 20 percent of families made seven times the average annual income of the bottom 20 percent. By 2009, 21 more states shared that particular distinction, including Maryland. "In the United States as a whole, the poorest fifth of families have an average income of $18,120, while the top fifth of families have an average income of $132,130," the Center on Budget and Policy Priorities reported last year.

•From the end of the Clinton administration through the Bush era, income disparity grew. Between 1999 and 2009, incomes actually declined by 2.5 percent among the bottom fifth of American families while increasing by 9.1 percent among the top fifth, according to the CBPP.

Despite these facts, the tea party continues to argue that allowing the Bush-era tax cuts to expire for households earning more than $250,000 annually would be detrimental to the nation's economic recovery.

The tea party is not alone. We've also heard arguments from New York — the center of the universe, where the cost of living is so much higher than everywhere else, so $250,000 is just barely middle class. Sen. Charles Schumer, the New York Democrat, argues that that the Bush-era tax cuts should be extended for those earning up to $1 million. But a state-by-state analysis performed by the CBPP shows just how narrow that view of the nation's class structure is: Since 1980, average incomes in New York grew by $108,000 among the top 5 percent but by less than $1,000 among the bottom 20. The New Yorkers who defend $250,000 as "barely middle class" don't even have an understanding of the disparity around them.

Another thing: The tea partiers claim the nation needs to cut spending and reduce deficits. But while they offer no rational ideas for cutting spending, they defend keeping tax cuts for the wealthy that would cost an estimated $700 billion over 10 years.

So, tea partiers might claim to be independent, operating as outsiders, but behind the handmade rally posters and under the three-cornered hats, there's nothing really original: Starve the beast of government, give tax breaks to the rich and wait for prosperity to trickle down. We've heard all that before. What we haven't heard is outrage over income disparity and anger over the accumulation of wealth by an American elite almost completely estranged from the working class. Until the tea party gets riled about that, and about the rate of poverty in our midst (the highest since the 1960s), it's just doing the bidding of the political-corporate class and its allies in the Republican Party.

Dan Rodricks' column appears Tuesdays, Thursdays and Sundays. He is the host of Midday on WYPR, 88.1 FM. His e-mail is dan.rodricks@baltsun.com.

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