Sunday, June 12, 2011

What about the Middle Class?

For the sake of full disclosure, this post is a reaction to the television ad that is currently being run by Gov. Mark Dayton and his party to gain public support for their approach to the budget deficit and the problems with our economy. What I'm most concerned about is their assertion that these policies are all about protecting the middle class. I recognize that this has been the strategy of the Democratic Party in the last two elections: that they are the party concerned about protecting the middle class. As a child of middle class parents and someone who is a member of the class myself, I disagree strongly with the claims that these policies will "preserve" the middle class. In my view, the ideology and policies of the party of FDR, LBJ, Jimmy Carter, Bill Clinton, and Barak Obama oppose the values, needs, and aspirations of the middle class.

I begin with the central fallacy behind their claim that they are the party of the middle class. Writers on their side such as Frank Rich and Robert Reich claim that Republican tax policy is responsible for the growing separation between rich and poor in our society and thus for the financial set back suffered by the middle class. Matt Taibi of Rolling Stone Magazine wrote, "The last ten years or so you have seen the government send massive amounts of money to people in the top tax brackets, mainly through two methods: huge tax cuts and financial bailouts."

Notice the chosen word "send" in regard to government activities. First, the government doesn't send money through taxation, it takes it. Taxation is legal confiscation that we agree to for the common good and the rule of law. One of the significant problems in Greece today is that the level of taxation has risen to such an outrageous level that a vast number of wealthy Greeks feel justified practicing tax evasion. At some point, raising taxes in any nation is counter productive as people take steps to protect what they have earned. In our own society, the use of tax shelters, off-shore investments, and other forms of legal tax evasion have been the means by which tax revenues rarely rise above 19% of GDP no matter the tax rate.

Why is the left so concerned about how much the wealthy pay in taxes? Is it merely an issue of "that's where the money is" or is something else behind this concern? Notice that when they speak of the issue they often appeal to "fairness." The rich must pay their fair share or raising the capital gains tax is the fair thing to do. But the wealthiest 1% provide 40% (they earn 24% of the nation's income) of the revenue from income taxes now. They are already paying far more than their "share" of the expenses of government. Looking at this statistic one must ask, what does the left mean by the word "fair?"

Closely related to fairness is the notion of leveling. We often hear of the need to "level the playing field," what they appear to mean by that is the profits and incomes of the top earners need to be brought down so the incomes of the poor and middle class can be brought up. But if we expect the government to do the "leveling" we asking for the redistribution of income and a process that contradicts traditional American economic values. So, it mystifies me how tax policy can have anything significant to do with restoring the middle class. It seems, rather, an act of class warfare and an attempt to bring rich people down a notch or two.

To relate this to middle class values, both my father and my grandfather were small business men. They reflected one of the central values of the middle class; self-reliance. They literally hated the idea of getting something they didn't earn or deserve, and government charity was at the top of the list. The very idea that we should sustain the income level of the middle class by redistribution of income from the wealthy, the "spread the wealth around" statement by President Obama, is an utter contradiction of middle class values.

Further, while government does have an important role in society, much of what is does is counterproductive. One of the great frustrations of the middle class is that their taxes are squandered for programs that don't work, for an educational system that never seems to improve, and for a welfare system that is incapable of dealing with the root causes of poverty and thus only perpetuates the problem. It is the middle class, by the way that pays the tax bills, they and the wealthy provide 97% of government revenues. So explain to me again, how the party of big government is also the party of the middle class.

The irony is that enlightenment philosophy, the philosophy that drives so much of liberal ideology today, is radically opposed to what many call, "middle class values." Among those values are life-long marriage, the work ethic, the traditional family, the importance of religious faith, the moral and spiritual education of children, thrift and savings, and charitable giving. Just about every one of those values (except possibly savings and charitable giving) are under attack today from the very party that claims to be the party of the middle class. Because of this obvious animosity to what are core values for my family and I it is very difficult for me to take the claims of the Democratic Party seriously. They may be concerned about income inequality and the economic difficulties facing the middle class, but their solutions and policies end up not helping because they end up weakening the very principles and freedoms that produced the American middle class in the first place. For the middle class, with friends like the democrats, they don't need enemies.

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