The Shrinking Middle Class

Why Is the Middle Class Shrinking? 

By Lady Rhiannon

 

                The greatest assault to the middle class has been the corporate takeover of our government. The CEO’s and major power holders of American corporations have invested billions of dollars in endorsements, contributions, and out and out bribes to ensure that their political loyalists will defend their interests in congress. There has also been a rise in the number of people going back and forth between being politicians (especially republican) and being corporate leaders. The Bush family has been in the oil industry for years, and Dick Cheney ran Halliburton before becoming vice president, and Cheney also worked alongside Nixon. Romney is now the headliner for Corporate interests and is fighting his battles for the sake of the "job creators"....as Republicans prefer to say rather than the "filthy rich".

Corporate interests have taken over the tax system and created a formula designed to shrink the middle class and make the rich richer. Most of the middle class workers pay 24-35% in taxes each year, but 280 of the largest and wealthiest corporations pay an average of only 18%, and there were 28 companies in 2011 that paid absolutely no taxes at all. Bank of America took $336 billion in bailouts in 2009; they made 4.4 billion in profits the next year, but paid no taxes. Google keeps their tax rate at about 2.3%. 
Our government also spends over 90 billion dollars a year in corporate welfare, which does not go to struggling business, as the name might indicate. This money goes to the largest, wealthiest corporations as an award for doing so well. Corporate welfare does not include bailouts and government subsidies, and it is almost twice as much as what we pay to all other social welfare programs that were designed to genuinely help actual people.

The Internal Revenue Service reports that the 400 highest paid incomes in the country (aka: the richest 1%), between the year 1992-2007, saw an income increase of 392 percent. However, in that same period their tax rate went down by 37 percent. Also, payroll tax rates have gone up (which primarily affects the middle class), while corporate tax rates have gone down significantly. The bush era tax cuts, which were renewed in 2010, benefited the top 0.01% earners the most with a 146,000 dollar yearly tax cut, while the middle and lower classes received no benefit. A minimum wage job in 1969 could support a family of three, now minimum wage cannot support one person. Estimates assert that minimum wage would be twenty-three dollars an hour if wage increases had stayed in sync with the rate of inflation.

The system in set up to cause more and more people to fall below the poverty line. Not only does the tax system benefit the very rich but pensions are disappearing, health care costs are debilitating, big business has beaten small business half to death, and corporations outsource and downsize job positions, and decrease wages, in spite of their record breaking profits. Once a person falls below the poverty line, whether by crisis, illness, job loss, or other form of disaster, it is extremely difficult to climb out of the hole. This is what happens when corporate ambition and greed is allowed to have free reign over government.

 

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Poe, C. (2011, April 10). Top ten list: Tax evaders. Retrieved from http://communities.washingtontimes.com/neighborhood/ad-lib/2011/apr/10/tax-evaders-wall-shame/

Kocieniewski, D. (2011, November 3). New york times. Retrieved from http://www.nytimes.com/2011/11/03/business/280-big-public-firms-paid-little-us-tax-study-finds.html

The Internal Revenue Service, http://www.irs.gov

Tischler, H. (2011) Introduction to Sociology: tenth edition.