America’s New Aristocracy

Just as an iceberg’s mass is largely hidden beneath the waters surface, despite state and federal budgetary shortfalls, taxpayer priorities remained primarily concealed…until now. The call for austerity measures and the budgetary turmoil experienced in Wisconsin has taken a state economic union-busting policy and turned it into an explosive national ideological battleground.

Governor Walker managed to destroy a budgetary surplus with the sweep of a pen, by giving tax cuts to corporations and was going to make the public workers pay for it. Simply put, public unions ability to collectively bargain was to blame for the deficit he had created and if the peoples hard won rights could just be revoked, then state government could balance a budget.

A thinking person should ask, “If the roughly 39% public union members are such a economic burden, then how did they manage all this time”? Judging by the massive protests held in Madison to oppose such measures, swelling at times to over 200,000, the people of Wisconsin weren’t convinced by this flawed leap in logic and ask just that.

Its not just about expenditures its also about the loss of revenue, too.

Federal income tax on the top earners has been drastically reduced over recent decades and in 1986 President Reagan signed into law the Tax Reform Act which slashed the top tax rate on individual income from 50% to 28% which was the lowest rate since 1916. In 1997 President Clinton signed another tax act which reduced capital gains taxes and following the trend President Bush signed the third largest tax cut since WW2. This act, the Economic Growth and Taxation Relief Reconciliation Act of 2001, further cut rates from 28-25%, 31-28%, 36-33% and 39.6-35%. In 2003 the jobs and Growth Tax Relief and Reconciliation Act reduced the tax rate on capital gains and dividends to a scant 15%.

Not only did such measures drastically reduce much needed revenue, especially during massive wartime military spending, it also created a steep income gap inequality and tightly concentrated power. In 2007 the top 1% owned the following: 62.4% of business equity, 60.6% financial securities, 38.9 % trusts, 38.3% stocks and mutual funds, 28.3% non-home real estate. To put that into context, by comparison, the colonial aristocracy constituted roughly 5-10% of the population.

Cut Cut Cut

There is much DC clamor about cutting programs for austerity and it always boils down to the same thing; which social programs for the poor and middle class should be cut to pay for the decades old practice of giving huge tax breaks to the top earners and corporations. When it comes to finding the funds necessary to continue illegal warfare, which has incalculable costs due to human misery and suffering, politicians refuse to look where wealth has aggregated, into the hands of the obscenely wealthy due to bailouts and unfair taxation and instead attack the last vestiges of refuge for the disadvantaged and disenfranchised. Turns out, the high cost of life and limb already paid for by the middle and lower classes is not price enough to satiate the appetite of the affluent.

A matter of priorities.

As budgets get slashed as many as sixty children may have to occupy a single classroom but at least Exxon and Big Oil get to keep their subsidies. Never mind that in Florida, school buses now stop at hotels to accommodate the increasing number of homeless students who are now more and more able to tell you what it feels like to go to bed with an empty stomach.

Back in Wisconsin, the anti-union bill passed despite the protests. A loophole was found by the republicans and the absent democrats weren’t required to attend as long as the fiscal measures were removed from the bill. These days it seems as if politicians and corporations can do as they please despite the will of the people. The new aristocracy, exemplified by the Koch brothers, has big plans for its national plantation and with unions out of the way there is little one person can do to stop them. And well beyond the campaign finance factor often pointed out in liberal media outlets the real issue at stake is about ending democracy itself.