Monday, May 9, 2011

That Magic $250,000 a Year

Various conservatives have remarked upon the significance of the Obamian $250,000 a year dividing line. Above that are the rich that must "pay a little more" in taxes and below it are--well, the liberals.

Otherwise why wouldn't Democrats be demonizing everyone over $150,000 a year, or $100,000 a year, or anyone over the median of about $50,000 a year?

Reihan Salam takes a look at this.

In an essay titled “Desperately Seeking Revenue,” Rosanne Altshuler, Katherine Lim, and Roberton Williams of the Tax Policy Center found that achieving a budget deficit of 3 percent of GDP by 2020 through tax increases on over-$250,000s would require doubling their rates, kicking the top rate to 76.8 percent.

A far less damaging strategy would be to reduce "tax expenditures", or loopholes, in the federal income tax, but that would affect liberals, especially in the $100,000 to $250,000 range, and they are the core base of Obama vote.

When our liberal friends go on about how the rich have benefited from the Reagan and Bush eras they neatly elide their own situation. For over the last 50 years there has been a huge increase in employment of experts in government, from colleges to regulatory agencies, that has hugely benefited liberals. Of course, liberals don't earn multimillion dollar salaries in these jobs but they do earn good money, often propelling a liberal couple into the six-figure income bracket.

Charles Murray is saying the same thing in his upcoming book about how well the upper-middle class has done on a variety of statistical indices in relation to the rest of America, most notably, in marriage.

The culture war is, of course, a class war between the upper-middle class, the educated elite, and the rest of the middle class. Up to now this war has been a stalemate because the liberal elite has bought the support of the underclass and other financially stressed Americans with the money of the rich (who pay 40 percent of federal income tax on 22 percent of the income).

My guess is that the major political achievement of the Obama administration is going be chopping off another limb of the Democratic coalition. With every decade it becomes more and more obvious that the administrative welfare state that tosses crumbs to the poor and the middle class is in fact government of the educated elite, by the educated elite, and for the educated elite. Everything else government does is just window dressing and tactical compromise.

In the New York Times today Paul Krugman chastises the elite for blaming the ordinary American for the mess we are in. He politely shows how the Bush elite brought all the messes down on our heads. Of course he would, he's writing for liberal NYT readers. But when you get past Krugman's partisan pot-shots, it is the educated elite of liberals that has brought the current spending crisis to a head, and it is liberals--those lucky few in the $100,000 to $250,000 a year range--that will soon feel the wrath of the people.

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