Thanks California Republicans for Screwing the Middle Class

by Ellinorianne/ OC Progressive / April 2, 2009

It was just over a month ago that our State Legistlators and our Governor were telling us that “everyone had to give up something to repair the state’s finances”.  It made a good sound bite and attempted to create a shared sense of urgency.  But that’s about it, it’s not the reality of the 42 billion dollar fix.The reality is if you’re a bus driver in the OC, you lose your job, while bus riders see a draconian cut in service. If you’re a multi-national business, you get a fat new tax cut.

“As services are cut and every ordinary taxpayer will have to pay more, it is appalling that major multinational corporations get new tax breaks,” said Lenny Goldberg, executive director of the labor-backed nonprofit California Tax Reform Association. “Everybody is being asked to sacrifice, except for large corporations, who instead get huge tax cuts.”AP

So rather than raise taxes on everyone where as Arnold put it, we all “give up something”, we’re facing massive teacher layoffs and cuts to important social services that are much needed right now because Republicans have the ability to hold the budget hostage by the 2/3’s vote.And as our friends at Calitics were able to point out, US Census Proves It: California NOT the Highest Tax State.  It’s something a lot of the religiously anti-tax use as a talking point to decry the newest taxes to help get us out of a hole.  A hole that was created by Republicans cutting taxes at a time when we should have created a rainy day fund.  As long as they get their way, Republicans find it convenient not to stand in the way of what they characterize as “excessive spending” until it suits their agenda.

Something that jumps out when you drill down on this study is that California has neither a state estate tax or a mineral extraction tax, although we lead the nation in federal estate taxes and are still a major oil-producer. Much better to increase the sales tax on the poor than have an estate tax that might be deductible from federal estate taxes or a tax on oil companies.

The California Budget Project estimates the tax hikes will disproportionately hurt working-class earners. A couple with $40,000 in taxable income will see a 12.9 percent increase in taxes, while a couple making $750,000 would get a 2.9 percent increase.

Of coruse Republicans stick to the regressive tax agenda because it suits their cause for big business.  But big business’s taxes have been declining over the last thirty years, not going up.  According to the The California Budget Project “If Corporations had paid the same share of their profits in 2006 as they did in 1981, corporate tax collections would have been 8.4 Billion dollars higher.”

Not only that, the growth of Corporate income far out paced adjusted gross income from 2001 to 2007 by 578% versus 39.7%.  Corporations grew rich but unlike the logic of Republicans, it did not translate to better paying jobs for Californians, that trickle was just that, a trickle.  The burden continues to be on the wrong side.

The California Budget Project has a handy graph to demonstrate how coporate taxes have changed over the last two decades.

And it only makes sense that higher profits means higher bonuses for CEO’s and high earners not more jobs as Republicans like to toute.  If there is no higher demand then there is no need to create more jobs!  And if the wages of 80% of earners is growing at a much slower pace than the top 20%, who’s going to buy all those goods and services?

The graphs just get better and better, The California Budget Project also shows how regressive our taxes are by comparing what percentage of lower income households paid in 2007 as compared to higher income households.  The results are startling.

I don’t care who you are or what your philosophy is but this is absurd that people making less $18,000 a year is paying 4.6% more in total taxes than those in the top 1%.  Sure, they do pay more in dollar amount but proportionally the lower half is carrying far too much of the burden.  There is nothing that can grow in this kind of environment except corporate profits and the income of the top 1%.  That’s just a fact.

It’s obscene.  And as the OC Progressive’s Joe Shaw has pointed out over the last week there are two things to consider, businesses are not fleeing the State because of taxes and those who don’t want to pay their fair share are selfish.

Hell, when I’m driving to work this morning and listening to Bill Handel on KFI and he’s saying the same thing, you’ve got a head scratcher here.

You can only buy so much and consume so much.  I’m not going communist on you here, I don’t think that we should restrict how much money people can make and it’s not about redistribution of wealth but usually the people who make the most money rely on the most to do so.  The same can be said for corporations who rely more on our Courts, roads and State infrastructure to do their business.  They should also carry a fair tax burden to do so.

It’s about a fair tax system that doesn’t punish those who are working just as hard or maybe even hard than the top 1%.  They can’t go home and rely on someone else to clean their house and make dinner.  Everyone who has a job is working hard in their own way.

And as the Galts whine about giving their wealth away in order to help those in need there is one thing that they fail to realize, that help has a much higher impact on stimulating the economy than any tax cut can create.

For every dollar you cut corporate taxes you get $0.31 back.  For every dollar you use to increase food stamps, you get $1.73 back and extend unemployment?  The rate of return on that investment is $1.63, infrastructure spending is $1.59.  It’s just more short sightedness on the part of the Repubilcan ideology, where over the last 8 years their ideas have been proven to be WRONG.

The only thing that has grown in the last two decades is the top 1%, their income having grown 108% percent as compared to the middle, which is just 9%.  NINE PERCENT.

So you see, we have the middle class to thank for our economic boom, it wasn’t going in their pockets, it was happening at their cost.  This has to stop.  The Party of No (The regressives) has proven that it really doesn’t care about the middle class and those that prop up their ideology are merely supporting the continued screwing of the middle and lower middle class and the poor.  Thanks guys.