Michael Maiello's picture

    Middle Class Struggles Are All In Your Head?

    Congratulations, members of the American middle class!  Robert Samuelson at The Washington Post says that the system is rigged in your favor by craven politicians hunting for votes.

    If you look at how the federal government spends and raises its money, the bias for the middle class and poor becomes plain. In fiscal 2014, about two-thirds of the $3.5 trillion federal budget went for “payments to individuals.” This covers 59 million Social Security recipients, more than 54 million Medicare beneficiaries (overlapping with Social Security), 68 million Medicaid recipients, 46 million food-stamp recipients — and many more.

    This is all kinds of wrong, Social Security and Medicare are government programs with their own taxes behind them.  You receive these benefits as a sort of retirement annuity in exchange for paying into the program for years.  Medicaid and food stamps are forms of unemployment insurance that, yes, you pay for while you are working.  You may never need those programs. They are not generous and I would not wish them on anyone.  Samuelson then argues that the burden for all this falls disproportionately on the rich.  He says that the "richest 20%" of Americans taxes.

    …if you accept these numbers — which I have cited many times — it is not possible to pretend that the whole superstructure of government has somehow been turned against the middle class. This is not just a distortion of reality; it is the converse of reality.

    I accept Samuelson's numbers.  He is still wrong.

    According to the census, in 2011 the top twenty percent of households ranked by wealth had median net worth of $630,000.The median net worth of households in the third quintile, which  was about $68,000.  The median rich family is 10 times wealthier than the median middle class family but they pay only a bit more than twice as much of the country's tax burden (if they pay 69%, that leaves 31% for our middle class to pay).  Were the rich taxed proportionally to their wealth, they would shoulder about 90% of the tax burden.

    I'd be happy to have the middle class pay a larger share of taxes if that meant that the middle class were sharing a larger percentage of the country's wealth.  We have a progressive tax system.  If you're not paying, that means you're not earning.  We don't have a progressive tax system because we're rigging things in favor of the poor and the middle class.  We have a progressive system because taxing the poor is not a financially effective way to fund the government because the poor have no money.  The bottom quintile of households by wealth was worth -$6,000.  That's right, they owe somebody six grand.  They do not pay taxes because they cannot afford to pay taxes.  To them, a tax bill would be a desirable problem.

    Samuelson concludes that what's really hurting the middle class is a crisis of confidence after such a poor rebound from the Financial Crisis and the Great Recession.  But you can't eat confidence, nor can you use it to buy a car or a house or finance a retirement. Samuelson is right that if the middle and poorer classes are the majority and the U.S. is a democracy, the apparatus of government should be tilted in their favor.  But it clearly is not.

    The wealthy have greater influence over politicians and better access to them.  The poor and middle class disproportionately fight our wars.  The government does nothing while huge companies from banks to retailers to manufacturers, nickel and dime the populace, force their grievances into biased arbitration settings, drive down wages and export or automate jobs.  Were the government actually biased in favor of middle class interests, none of that would be allowed.  Were the government actually biased in favor of middle class interests it would not have saved Citigroup and Bank of America while allowing those banks to foreclose on middle class homes.



    Those that pay more in federal income taxes alone than public teachers make (in gross pay) should not feel oppressed.

    I imagine most people on food stamps or receiving Medicaid would gladly have that burden.

    I have been wracking my brains to add another log to your fire but you pretty much said it all.

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