Wednesday, November 09, 2011

Still Getting It Wrong

I had a brief moment of hope that maybe the “Occupy Wall Street” people were finally making some sense when I read the headline that they are planning a march from New York to Washington, and then I read on and saw that it is only a small splinter group of them and that their target is to rescind the Bush tax cuts for the rich. That is off target in so many ways it’s difficult to decide where to start.

The tax cuts in question are actually Democratic tax cuts. Blaming Obama for Bush’s wars may be misplaced, but taxes is another matter; it was Obama who put these current taxes in place for this year and next, and it was the Democratic Party in control of Congress which failed to make even a token effort to rescind them for two full years prior to that. They are no longer the “Bush tax cuts.”

Inequality of wealth is not due to the 3% cut in taxes which the Bush government granted to both the wealthy and the middle class at the same time. While “the rich” had their taxes cut from 39.6% to 35% the middle class had theirs cut from 28% to 25% and the poor had theirs cut from 15% to 10%. All of that may not have been the most fair thing in the universe, but it certainly was not the root cause of the protested 99% inequality in the distribution of wealth.

“The rich” did not get that way because of not paying taxes, despite all of the popular rhetoric claiming that to be the case. They fall into two classes of theft, actually, both of them entirely legal.

One class became rich in much the same manner that homeowners did, by turning paper into money. When you buy a house for $150,000 and five years later it is “worth” $500,000, did it become larger in that five years? Did it begin performing some function not previously performed? Of course not. It is still worth the $150,000 you paid for it, only now you can persuade some sucker to pay $500,000 for it. Or to lend you $500,000 against the “equity” in it. The wealthy on Wall Street became rich in much the same way, selling “financial instruments” for high prices that were actually worth the cost of the paper they were printed on.

The other class is the owners of companies who shipped production jobs overseas, stealing those jobs from the middle class. Occupying Wall Street is stupid, because those companies are not headquartered on Wall Street, and taxing those owners is stupid because doing so is not going to bring those jobs back.

Politicians, Obama in particular, have sold us on “tax the rich” as a diversion to take the heat off of themselves, and "Occupy Wall Street” has bought in to the diversion with great enthusiasm. Rather than holding elected officials accountable, they seem to think that a token punishment on “the rich” who have been sold to them as the source of their problems will make everything wonderful again.

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