By Bruce Fisher
Buffalo, NY – President Obama acknowledges that national health care reform is going to cost money. We're going to have to spend now in order to change the system and save later. The Washington question is Buffalo question: who can afford to pay for the change?
That gets us right into the issue of who has what in America.
Goldman Sachs, the big investment bank that that accepted $15 billion in taxpayer bailout money, reported last week that had a $1 billion profit last quarter. The stock market may only be back up to 9000 after having fallen from 14,000 last year, but some folks who make money from financial speculation are still doing quite well.
And it's those folks whose taxes may go up to pay for healthcare reform.
Forgive me if I am not impressed with their howls of protest against "class warfare."
According to the Congressional Budget Office, the top one percent of people who file income tax returns had average incomes of over $1.4 million. These are mainly people whose high incomes come from financial speculation, rather than from work. They have had Washington squarely on their side for some time now.
And I mean all of Washington. Democrat Bill Clinton signed a law that let commercial banks buy risky derivatives. Democrats and Republicans alike signed off on globalizing American factory jobs. George Bush ended the uptick rule that had prevented crazy speculation for decades. And they all let Bernie Madoff be Bernie Madoff.
The financial speculation industry has been a leading factor in the great shift from a relatively egalitarian America to an economy in which the incomes of the very well-off swell but middle-class incomes stagnate and lower-income folks go even lower.
It's time to get some numbers into our politics.
Here in Western New York, more than 40 percent of people who file tax returns report incomes of less than $20,000 a year. Income polarization is a reality. The top five percent of taxpayers had incomes larger than the bottom 90 percent. When you add up all the incomes of everybody who makes less than $100,000 - in other words, over 9 out of 10 tax-return filers in Erie County - their income is just under 53 percent of all the taxable income reported here; whereas Folks reporting taxable income over $200,000 had over 25% of all the income here. Here's another way of saying it: the richest 7,300 folks in this county reported as much income as 310,000 of their neighbors.
Nobody should have a problem with making money. This is America. But I do have a problem when I see that the bottom is falling out of the middle class.
I for one am tired of hearing that taxpayer money should not support good wages for construction workers whether or not they're in a union. It's bad economics for IDAs to hand out tax breaks for projects that enrich financiers but keep construction workers poor.
And as for taxes, even the total tax rate paid by very rich financial speculators is about the same as the rate paid by a household with two middle-class salaries.
I don't know if Washington will have the courage to fund healthcare reform the right way, with progressive taxes. But I hope that we start getting some real numbers back into our political discussions. So let's talk about money and end the class warfare - against the middle class.
Artvoice columnist Bruce Fisher is director of the Center for Economic and Policy Studies and Visiting Professor of Economics at Buffalo State College.
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