The Great Tax Shift: Asking Less of Those With More

[Donnachaidh]

http://wealthforcommongood.org/shifting-responsibility/#shift

The scene has become depressingly familiar. A governor — or a mayor or a county executive — steps to the podium and somberly intones the necessity of making “hard choices” and “living within our means.” The elected leader then proceeds to announce prodigious budget cuts that will overcrowd classrooms, furlough public employees, and deny medications to poor families.

Some observers blame these painful podium processions on the Great Recession and the resulting drop-off in income that can be taxed. Others blame former President George W. Bush. His administration’s massive 2001 and 2003 tax cuts left the federal budget deeply in the red — and state and local governments on their own and overwhelmed by federal mandates for everything from Medicaid to special ed.

The recession and the second Bush administration have no doubt contributed — and significantly so — to the fiscal crisis we face today. But the roots of today’s crisis go back farther. Indeed, by George W. Bush’s inauguration in 2001, the prime damage had already been done. By 2001, the United States had already stopped taxing the rich at the levels that had promoted middle class prosperity in the mid 20th century.

Middle-class Americans entered the 21st century paying a higher share of their incomes in federal taxes than they paid midway through the 20th century. Wealthy Americans entered the new century paying less. Far less. Over the last half-century, America’s wealthiest taxpayers have seen their tax outlays, as a share of income, drop enormously, by as much as two-thirds for the highest-income grouping that the IRS tracks.

More at the link --

[dkf]

1. I would say it is less the tax code and more about the worse job prospects that is hurting the

Middle class.

Generally if you are doing well you don't expect much individual help from the government. Therefore cutting government won't hurt the middle class. But if you don't make a decent salary and need government services and tax rebates to survive then cuts will hurt.

But first and foremost it's our salaries and company benefits that have suffered.