Tuesday, November 8, 2011

Paul Ryan and GOP Promotes Class Envy

Paul Ryan and like-minded defenders of our contemporary top 1 percent still celebrate America as a “land of opportunity.” But they’ve started acknowledging how hard average Americans today have to struggle to get by.

And in these troubled times, as Ryan openly admitted in a major address he delivered late last month to the right-wing Heritage Foundation, many Americans may begin to “question” just how much opportunity we really do have.

But struggling Americans, Ryan went on to exhort, must not let themselves fall prey to those who argue that “government’s role is to help them cope” — or entertain the notion that “most differences in wealth and rewards are matters of luck or exploitation, and that few really deserve what they have.”

“That’s the moral basis of class warfare,” objected Ryan, “a false morality that confuses fairness with redistribution and promotes class envy instead of social mobility.”

But the poor and middle-class don't feel that way at all towards the rich. Just the opposite is true. Ordinary working folks admire and aspire to be more like them. It's rich people who feels envy towards someone richer -- such as the uber-rich. Did you every hear of yacht envy?

So what answers for our troubled times do Paul Ryan and his fellow defenders of privilege have to offer? We must, they insist, end the government meddling with the “free market” that they claim created our current inequality in the first place.

“Absolutely, there’s huge income inequality, and it started right here in Washington,” as Ryan’s congressional colleague, Bill Flores from Texas, recently told a Politico reporter. “The way we fix that is getting the government out of the way of the private sector so we can put these people to work.”

The concentration of wealth and power within the top 1 percent, the Ryan crowd is maintaining, isn’t gutting the American Dream and creating inequality. The government is.

A clever — and totally bogus — assertion. Government has been “getting out the way” for over three decades now, and that’s why Americans are hurting.&

Lawmakers over these years have undone the federal and state regulations that protect consumers and workers from corporate greed grabs. They’ve slashed the taxes rich people pay and squeezed the tax-funded government programs that help average Americans enter into — and thrive inside — the middle class.

Analysts have noted the irony here. Ryan and friends want to cut and eliminate the redistributive and social investment policies — everything from progressive taxation to quality early childhood education — that have successfully fostered mobility across generations in the world’s more equal nations.

But just observing this irony leaves unchallenged the myth at the core of the right wing’s defense of inequality: the notion that any society where people can go from rags to riches is working just fine — and needs no overhaul, no matter how unequal that society may be.

We should have challenged the absurdity of this claim ages ago. That some people can go from rags to riches, after all, tells us precious little about a society's basic goodness.

Take, for instance, the American slave South before the Civil War. No American in their right mind today would consider the slave South a good and decent society. We see that era as a time of exploitation and inhumanity. Yet the slave South had its rags-to-riches stories.

Under slavery, in certain situations, slaves could “buy” their freedom. Some freed slaves actually accumulated appreciable wealth. But these rags-to-riches stories in no way, of course, made slavery any less reprehensible.

Paul Ryan, predictably enough, talked up rags to riches in his widely ballyhooed Heritage Foundation address. A “recent survey of over 500 successful entrepreneurs,” he triumphantly noted at one point in his speech, had “found that 93 percent came from middle-class or lower-class backgrounds.”

The defenders of privilege just don’t seem to get it. In truly decent societies we measure success by how many people are leading rich, fulfilling lives, not by counting how many people are becoming rich beyond measure.

As an aside: Paul Ryan (and Senator John Boehner) saying we don’t have a revenue problem is like the Iranian president saying the Holocaust was a myth. Today we have the lowest capital gains tax in the history of our tax code, and corporate taxes are lower now than they've been since 1969 (but now with far more loopholes). Yet Republicans want to lower corporate taxes more and/or completely eliminate capital gains taxes all together (such as with the Herman Cain's 9-9-9 Plan or the flat tax).

Low Corporate Taxes = Excessive CEO Salaries

It doesn't matter what a corporation pays in taxes as compared to GDP, or how it's compared to any other index of measure (to skew the numbers), it's what they actually pay to the U.S. Treasury after loopholes (aka "deductions") that matters most. And for the last 25 years corporations have actually paid historically low taxes.

While today some corporations may have paid the maximum rate of 35% (when it was over 50% in the 1950s), many others paid ZERO, with the average being only 18%.

The same can be said for their CEOs and other high-income earners. While although the top bracket is also almost historically low (at 35%, when it was once over 90%), what they actually pay is nearer to 15% because the majority of their income is earned through capital gains.

And because corporations have been paying a low effective corporate tax rate for decades, that didn't keep them from outsourcing jobs overseas for cheap labor, but rather, it did enable them to pay very excessive CEO salaries...who only mostly pay 15% in federal income taxes on their capital gains.

Paul Ryan and the GOP has Waged Class War with Food Stamps

How Corporate Tax Dodgers Hoarded $2 Trillion

Rags to Riches: Who Should Really Care?

Tax Rates during the Fabulous Fifties

Historical Tax Rates on the Rich from 1862 to 2011

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