This is my March column from the St. Cloud (MN) Times.
---------------------------Times Writers Group: Class warfare? Know who wins
On Thursday the Fox News Forum responded to President Obama's address to Congress with a column titled "Will Taxes Become Obama's Weapon of Class Destruction?"In his rambling address to the Conservative Political Action Conference on Saturday, Rush Limbaugh accused Obama of "fueling the emotions of class envy." On Sunday Bob Erlich, the former Republican governor of Maryland, told Chris Matthews on Hardball that Obama's budget was "all about class warfare."
If buzzwords were stocks "class warfare" would be the hottest investment in the market now, which is strange for a country that treats class like a taboo subject.
A majority of Americans self-identify as "middle class" and the social barriers that once prevented those who worked for a living from rubbing elbows with inherited wealth have substantially disappeared. The patterns of speech, habits of dress, in some cases even the neighborhoods that once divided people according to their wealth have been suppressed, co-opted, or driven behind closed doors as everyone in America aspires to appear middle class.
But the truth is we're not all middle class.
For the sake of argument let's imagine there are five classes in the United States, each with equal populations. For convenience we'll call them the working poor, working class, middle class, upper middle class, and wealthy.
From the end of World War II until 1980, the real incomes of all five groups increased dramatically, more than doubling for all but the wealthy, who realized a 94 percent increase.
But between 1980-2000 things were starkly different. Incomes for the bottom 40 percent — the working poor and working class -increased by only single digits. The middle class saw an 11 percent increase and the upper middle class a 19 percent increase. But the wealthy enjoyed a 42 percent increase during the same period.Good for them, some will say. But was it good for anyone else?
According to the U.S. Census Bureau the median household income today is just a hair more than $50,000. Half of all families earn less, half earn more. Conveniently, the per capita GDP for the United States is also close to $50,000, so if the GDP were divided equally among all Americans a family of four would earn about $200,000 annually. But in reality almost half of all income goes to the top 20 percent, the "wealthy" class. The wealthiest among them — the top 5 percent overall — actually receive about 22 percent of all income each year.
The Associated Press reports the Obama tax plan that conservatives are decrying would result in a median family — four people living on an income of $50,000 — owing no federal income tax at all. Tax cuts would continue for families earning up to $150,000.
This sounds like a policy that favors the interest of at least the 80 percent of Americans who fall below our arbitrary definition of wealthy. The tax increase being touted as "class warfare" by some is actually just a proposal to let the Bush tax cuts for the wealthy expire, restoring a top rate of 39.6 percent for couples earning more than $250,000 per year.
In past times of crisis the wealthy were asked to contribute more because they had to means to do so. The top tax rate World War I was 77 percent. In 1933, at the start of the New Deal, it was 63 percent. At the end of World War II it was 94 percent and remained above 80 percent until 1963. In 1982 it dropped to 50 percent and since 2003 has been just 35 percent.
According to many economists and most pundits, we are in an economic crisis rivaled only by the Great Depression. If that's the case, how can asking the wealthy to contribute on the same level they did during the booming 1990s be a case of class warfare?
The next time Rush, someone on Fox or any politician complains about class warfare ask yourself this: Whose interests are they really representing?
The answer will help you sort the wheat from the chaff and to realize that what's best for the top 5 percent maybe isn't always best for those of us in the 95 percent below them.-Dr.DRL
