For much of the 20th Century, one of the labels that American politicians of a progressive bent feared most was the accusation that they were engaging in “class warfare.” Even for many on the left, the concept of class warfare – that is, of attempting to motivate and mobilize people of low and/or modest income to rise up against the wealthy – was widely frowned upon as antithetical to the nation’s longstanding tradition as a broadly middle class (or even class free) society. Forty years ago, the iconic liberal economist John Kenneth Galbraith dismissed the idea of waging class warfare against the rich in America as “uncouth.”
Today, sadly, this aversion to class warfare seems quaint – and not because the left got over its queasiness about the subject. In 21st century America (a nation in which three individuals own more than the bottom half of the country combined), class war has been declared and is being waged – often in blitzkrieg form – by the wealthy and the politicians they control in Washington and in dozens of state capitals.
For a classic and egregious recent example of class warfare in action, one need look no further than the competing conservative tax “reform” proposals now working their way through the United States Congress. Notwithstanding the “thou dost protest too much” complaint of House Speaker Paul Ryan that progressive critiques amount to – you guessed it – “class warfare,” the blatantly extractive and trickledown nature of these proposals is evident in both the broad strokes and the fine print.
The big picture
At their hearts, both the House and Senate tax proposals are – as usual – about slashing taxes on the wealthy and thereby starving core public structures and services that support the middle class. Veteran federal budget analyst Sharon Parrott of the nonpartisan Center on Budget and Policy Priorities explained it this way last Friday:
The Senate Finance Committee tax bill, like the Republican tax framework released in September and the House Ways and Means Committee tax bill, would drive up deficits by $1.5 trillion over the next decade and give very large tax cuts to the wealthiest households and profitable corporations but only token help to millions of low-income working families.
The core of the bill is a large corporate tax cut that would overwhelmingly benefit wealthy households, along with a tax cut for ‘pass-through’ businesses that’s also heavily tilted to high-income households and an estate tax cut worth $4.4 million (for estates from couples) for the nation’s very largest estates. These tax cuts are so costly that they require offsets like removing the tax deduction for state and local taxes to comply with the limitation that the tax cuts only increase deficits by $1.5 trillion over the decade. They leave little room for meaningful help to low- and moderate-income families.
Even a provision touted as targeting working families — an expansion of the Child Tax Credit — would do far more for high-income families than low- and moderate-income families. Some 10 million children in low-income working families would get $75 or less, while families with incomes between $150,000 and $1 million would become newly eligible for the credit. A married couple with two children earning $1 million would newly receive a full $3,300 Child Tax Credit, on top of large additional tax cuts from other provisions.”
And, of course, as Parrott also explains, the planned tax cuts for the rich are part of a “Republican two-step fiscal agenda” that she accurately describes this way:
Step 1: Tax cuts for the high-income households now, driving up deficits – House and Senate tax bills would increase deficits by $1.5 trillion and give largest tax cuts to the top-earning households and profitable corporations.
Step 2: Use higher deficits to justify cuts in critical programs such as: Medicare, Medicaid, Job Training, College Aid, Food Assistance.”
None of this is particularly new or surprising, of course. Republicans have been pushing tax cuts for rich individuals and profitable corporations for many decades. What makes the current wave of conservative proposals especially insidious, however, are the mean-spirited details. Consider the following changes being advanced by Republicans:
Student loan debt changes – Thanks to the fast-rising cost of higher education, Americans are already laboring under a mountain of student debt. Amazingly, though, the House tax plan would pour gasoline on this problem by raising taxes on those making student loan payments. Current law allows the deduction of up to $2,500 in student loan interest payments per year. Under the House plan, this deduction would be eliminated.
Medical expenses – Current law allows Americans to deduct medical expenses that exceed 10 percent of their income for the year. For many – especially the disabled, the elderly and those living in long-term care facilities who can pay tens of thousands of dollars in out-of-pocket expenses each year – this is a big deal. Once again, however, the House GOP plan would end this deduction outright. What’s more, as with the attempt to repeal the Affordable Care Act, this change would have a particularly negative impact in states like North Carolina that went for Donald Trump in 2016 because of the high number of people without health insurance coverage. The Senate would not, at present, pursue such a change.
Slashing the estate tax – The Senate proposal would double the value of estates that are exempt from the estate tax, from $11 million per couple ($5.5 million per person) to $22 million per couple ($11 million per person). The effect of this would cut the number of estates subject to the tax (an already minuscule number) to fewer than 1 in 1,000. Even today, only the largest 0.2 percent of estates face the tax; the other 99.8 percent pay no estate tax at all.
Removing the deduction for state and local taxes (SALT) in exchange for lower income tax rates – As Michael Leachman and Iris Lav of the Center on Budget explained last month, this would be a terrible deal for most Americans because: a) the income tax cuts are tilted heavily in favor of the rich and b) ending the deduction will encourage high-income taxpayers to avoid paying state and local taxes – a development that will make it harder for states like North Carolina to maintain funding for schools, roads, public safety and other essential services.
Raising taxes on schoolteachers – Under current law, teachers are eligible for a tax deduction of up to $250 for money spent on classroom supplies. Rather amazingly, this provision is on the chopping block in the GOP “reform” legislation. While this is obviously not a Republic-endangering matter, it is important to thousands of teachers across the country and symbolic of the misguided class warfare values at play – especially when it’s combined with the underfunding of public education that afflicts so many parts of the country (like North Carolina).
The above provisions are far from an exhaustive list. Other provisions would end the tax credit that helps parents adopt, eliminate a tax credit that spurs investment in poor communities, make disability accessibility more expensive for small businesses and take away critical income from immigrant families with kids. Other mischievous provisions would end the bar on churches endorsing political candidates and even abet the anti-abortion agenda by giving fetuses legal status as people for purposes of college savings plans.
As far reaching as the proposals under consideration are, however, the most amazing thing about the GOP tax blitz might well be the reception it is receiving from some on the market fundamentalist Right. Last week, the ultra-conservative National Review attacked Republicans for daring even to retain a higher income tax rate for some millionaires. According to these critics, such a provision amounts to – we’re not making this up – “class warfare.” Apparently, as far as the Trumpists and other conservative true believers are concerned, the biggest problem in modern America is that rich people don’t have enough money to trickle down to everyone else.
The bottom line: American plutocrats and their apologists have been waging class warfare in this country for decades and the budget proposals currently wending their way through Congress are just the latest blatant examples. Progressives would do well to acknowledge the true nature of the fight that has been thrust upon the country and move quickly to demand that politicians like Richard Burr and Thom Tillis declare, once and for all, which side they are on.