The working class was
raised on a steady diet of the American Dream and upward mobility. It was and still remains a chief motivator for
working hard and inspiring the working class to make the “right choices”. They are seeking to create a better
life for them and their families to climb the ladder of success. At some point
in the late 1970’s, a new thinking took hold and a new propaganda campaign started.
It became the war on the poor, the “welfare queen” and the championing of the
executives and the wealthier population as the “job creators” and the “standard
measure of hard work”. How could the working class ever question the more affluent “earning”
their money?
Our elected officials created a tax code that ensured
low to no federal taxes on that money they “earned” as the country, suffering from a deficit of tax revenue, began mounting debt from all of their tax cuts. To offset this tax revenue shortfall, the tax burdens increased on the
working class via their federal tax code and state and local governments. It
inspired me to write a paper on the “Redistribution
of Tax Liability” that has gripped our country for the last three decades
and continues to suppress our economic growth potential.
Americans can understand
the pressures from globalization and doing things to streamline production and
cutting costs to remain competitive, but the disproportionate rewards flying upward
while putting the squeeze on the average worker with scratch backs on differentials, holding down pay increases, increasing health insurance premiums, and a severe cut back on retirement benefits are difficult to
swallow while the execs get deluxe fringe benefit packages, skyrocketing
executive pay, and even higher still million dollar bonuses. Is the working class simply‘jealous' of the success of the executive class or is ‘jealousy’ used to dismiss the economic injustice that
is being waged against the working class? Why is there a direct relationship
between increasing productivity with executive pay while the median income of
the working class has stayed flat for decades and is now dropping? Those
productivity gains are generated in large part by the working class, but yet
they are not being rewarded for their hard work. They are being punished at the
finish line.
It is difficult to
believe there is no connection to the bottom line savings made by cutting
benefits and holding down pay of the working class and the
monies made available to executive coffers. With no cost savings, how
can there be monies to pay the next bonus? Certainly it is not unreasonable to
achieve corporate savings through changes in the function of the company
itself. No one would deny that such changes improve the long term financial
outlook of the company. It is also
reasonable to understand, as well, that working class givebacks do affect the
bottom line from which executive pay and bonuses are made. The working class
can only be grateful if their employer distributes the cutbacks over a period
of time rather than one swift axe cut. This may be the only mercy shown to
employees.
It has been widely reported that corporate CEO’s
are incentivized to keep wages low so profits will be higher to reap those high
bonuses. To add salt to the wounds, Americans have been sufficiently fed a diet
of “don’t punish exorbitant salaries by taxing them” resulting in a tax code
that favors our most affluent. There is no shared prosperity nor is
there shared sacrifice. According to the
Economic Policy Institute “CEO compensation increased more than 725 percent, a
rise substantially greater than stock market growth and the painfully slow 5.7
percent growth in worker compensation over the same period.” How can people
believe this is fair? How can people believe we should not tax the monies that benefit someone else? It is simply an act of wage theft.
It took decades of
demonizing the poor to distract us from what is being taken from the top both
by the tax code and the over inflated incomes and bonuses of the executive
class. Everyone wants to squabble about things like housing subsidies for the
poor and ignore that the middle and upper class housing subsidies called “mortgage
interest deduction” costing taxpayers well over 10 times more. We scream about
food stamps to feed the hungry, but fail to even be curious about the millions
of dollars that go to well healed farming industry and not the small farming
enterprises. Many of those “farmers” are Congressmen themselves collecting
million dollar paychecks via our Farm Bills. The total sum of tax breaks each
year for the affluent total 1.1 trillion dollars. The total for social welfare
is 50 billion. The Center on Budget Policy Priorities also stated it " federal income tax expenditures (all those tax deductions or "loop holes") together cost more than Social Security, or the combined cost of Medicare and Medicaid, or defense or non-defense discretionary spending." In a study by the Corporation for Enterprise Development also concluded that "much of the federal spending channeled through the tax code disproportionately benefits the wealthiest taxpayers".
When questioning the
outrageous salaries the defensive comments are “they have vision”, “they are
making our company strong”, and “they are doing what is necessary to survive”
aka “you are lucky to have a job”. Workers are told that executives “earned” it
and that it is the “markets” driving up executive pay not the executives
themselves or the Boards that in turn feed them via their quid quo pro
arrangements. Meanwhile the working class is told cuts are necessary for long
term financial viability. Do millions each year in executive pay have no financial consequence
on long term financial viability?
There are some interesting facts. Two
thirds of all new jobs are created by small business. Small business startups
are largely a working class adventure. Because many of our citizens are now
saddled with large sums of student debt and low pay, our innovators are resistant
to create new businesses because they are already cash strapped. America is
losing its innovative edge. Because 95% of all new money created does not reach
the working class pockets and often finds its way to offshore accounts, this
70% consumer driven economy will continue to stagnate. Those who have reaped
the financial gains cannot spend enough of what they are given to keep the
economic engine going. The working class has to spend to create demand which in
turn creates jobs, but corporate America continues to choke our job creators. No one wishes to deny someone being rewarded for their hard work, but corporate America isn't the only performer in the game.
