The current debates surrounding cutting the deficit and the mounting national debt underscore class struggle and class conflict at the heart of capitalism. Addressing the mounting deficit will require reversing over 30 years of supply-side economics, which has slashed taxes on the corporate rich and, along with unpaid wars and out-of-control military spending, has left the U.S. $14 trillion in debt, three-fourths of it from Republican presidents.
But instead of addressing the real causes of the deficit and national debt, the corporate elite — and their allies in both political parties — are targeting Medicaid, Medicare, and even Social Security, which has nothing to do with the deficit or debt and has a $3 trillion surplus!
Why is Congress making severe budget cuts when hundreds of profitable corporations are paying extremely low taxes or none at all? Fortune 500 companies like General Electric, Boeing, Verizon, Bank of America, and Citigroup pay no federal taxes. If you paid as much as $10 in taxes this year, you paid more than these pampered behemoths.
These and hundreds of other American companies use overseas and offshore tax havens to shelter their profits while claiming losses here in the U.S. These companies shift the responsibility to pay for our shared defense, roads, bridges, education, and public services onto small businesses and individuals. According to a recent report by the Institute for Policy Studies, over the past 50 years there has been a decided transfer of the tax burden away from the wealthy and multinational corporations onto the rest of us small fry.
The wealthy are paying the lowest tax rates in 50 years. A report by Wealth for the Common Good shows that the 400 richest people in America control more wealth than 150 million of their fellow citizens. And they are effectively taxed at just a 16 percent tax rate, while the working class pays up to 35 percent. These oligarchs' effective tax rate has dropped by two-thirds since the Eisenhower administration.
Income and wealth have become extremely concentrated in the hands of the super-rich. The richest 1 percent own nearly 40 percent of all wealth and get 25 percent of all income. The top 10 percent own more wealth than the bottom 90 percent, and they are taxed a lower rate for wealth than workers pay on wages. While CEO pay has skyrocketed, wages have declined, and the number of unemployed and working poor continues to grow. Just who is it that is waging class warfare?
If we are serious about addressing the deficit and paying down the debt, we have to repeal the Reagan and Bush tax cuts for the wealthy and cut corporate welfare and military spending — not, as the Republicans keep demanding, Medicare and social programs.
The Republicans want to cut gaping holes in the safety net to allow for more tax cuts for the corporate rich. The current GOP budget proposal includes $4.3 trillion in program cuts but offsets those cuts with $4.2 trillion in tax cuts, leaving only $155 billion in real budget cuts over the next decade.
Contrary to the propaganda of the Tea Party and its corporate sponsors, we are not broke. If corporations and households with $1 million of income paid the same tax rates they did in 1961, we would collect $716 billion more a year — $7 trillion over a decade. That is more than all the budget cuts proposed by the Republicans.
The American people seem to be ahead of their representatives in Congress. Vast majorities, even of Republicans and Tea Party supporters, oppose cutting Social Security, Medicare, or Medicaid and support cutting military spending and raising taxes on the corporate rich. The Progressive Caucus — the largest in Congress, believe it or not — has proposed a "People's Budget," which takes a top-down approach to cutting spending and raising taxes, but it is being ignored by the corporate media. I wonder why.
There is indeed a class war, but it is being waged by the oligarchs and corporate rich against the working class. Let's stop all the talk of budget cuts until corporate tax dodgers and the wealthy pay their fair share of taxes.
Jim Maynard, a well-known local activist, is the organizer of the Memphis Coffee Party Progressives & Democratic Socialists of America.