Class Warriors Explain Those Horrible Taxes

The picture below recently ran in the Wall Street Journal. It is a clumsy attempt to show us how horrible President Obama's taxes policies will be for us in 2013 what with those massive, job-killing tax hikes set to kick in.

I should not have to explain this, right? It is laughable, yes?

What? You're not laughing? OK, perhaps you cannot read the fine print, so here is my point. I will assume the Journal's calculations are correct. After all, taxes usually do go up when taxes are raised. However, the only way one can come up with attention-getting tax increases of up to $21,608 is to use outlandish income examples, as the Journal has done.

A single parent, with two children--and a $260,000 income. Uh, yeah, that is pretty typical. And that sad face she has; her kids look like they are out of a Dickens novel. The rest of them look as bad. The young single women in the bottom left will also be financially ruined; she only makes $230,000 per year, while the family of six squeezes by on $650,000.  Great time to be retired, I guess; no tax increase and hey!, $180 grand a year.

Does anyone think any of the four examples represents anyone other than the 1%? With massive deficits, rising poverty, and a right wing that howls incessantly about balancing the budget, how many Americans think that tax increases running from 0% to 3.3% on people earning in the range of a quarter million and more are where we should direct our tears of outrage?

The Journal could have used income figures of say, $40,000-$60,000, a range far more representative of most Americans. The problem is that the thousand dollar tax hikes it portrays would no longer hold true, and that, of course, is why the Journal didn't use them. It had to willfully and crudely mislead, and hope that we wouldn't notice.

Does the Wall Street Journal think it is being clever?  Or is it even more tone-deaf to America's reality than I thought?

Hat tip to Avedon Carol. Another read, with maybe a clearer picture is here.

Wage Suppression Revisited

On March 23, 2011 I posted an article on the results of wage suppression. In it I reviewed academic studies demonstrating the growing gap between productivity growth, which has been substantial, and wage growth, which has been nil. This gap is recent, the direct result of conservative policies favoring corporations. I followed up on April 20, 2011 with another article on why the rich vote Republican. Again, we see clear evidence of a middle class becoming undone by conservative policies.

Below is another depressing snippet of data. It may be hard to see, but it shows an index of labor's share of income (2005=100). There is a fairly steady drift downward starting around 1980, a short-lived upward trend in Clinton's second term, and a significant deterioration throughout Bush the Lesser's eight years. The trend continues in the Obama years. Some discussion and a bigger example of the chart can be found here.

To put this data in very stark terms, go have a look at Overworked America, 12 charts that will make your blood boil.There is a lot there, but one fact underscores what I have been trying to say about wage suppression in the US: wages generally followed productivity increases for most of the 20th century, at least after the New Deal. As productivity increased, so did wages. That is no longer the case, as I show above. If labor had received commensurate wages, average income would not be around $50,000, but $92,000.

Think about that for a moment. Our recession began and continues because our economy heavily depends on consumer spending. If you ever wonder why spending is flat, it is because wages are too.  Where have the productivity gains gone? The 42 grand per worker? To corporate America and the investor class.

Despite this, Republicans never miss a chance to make you think unions are to blame for America's economic illness. It takes a lot of gall to make such demonstrably false statements.

Yet millions of Americans believe them.  And that takes a lot of ignorance.