Simplicity is a major threat to people who make their livings in certain professions. Deep thinkers can only justify hefty billing and huge salaries if they can concoct weighty solutions to weighty problems.
This necessity is of course well understood by those charged with fixing the American economy. Thus, the very best and brightest in Washington anguish endlessly over this challenge, coming up with diverse solutions that share one common quality — they never address the real problem simply and directly. In consequence, their nostrums are wonderfully arguable with other best and brightest in Washington, creating guaranteed highly compensated, long-term employment for themselves.
I therefore present the obvious solution to this nation’s economic malaise with the absolute certainty that it will go nowhere. The reason being it is so simple and obvious, so sure to have very positive effects immediately, that no one can make money making it more complex than it really is.
First, here’s our country’s major economic problem: The middle class is seeing its incomes wither and it lifestyle squeezed. The rich and very rich, meanwhile, are seeing their own incomes and lifestyle flourish mightily. This dichotomy is socially disruptive, a cause for growing suffering, inherently unsustainable, and a lousy overall economic state of affairs.
That’s the problem. Here’s the solution: Increase taxes on the rich and very rich, and apply ALL the additional revenue generated toward reducing the tax rates of the working middle class. This would NOT be an overall tax increase, merely a tax shifting. It would directly, immediately, and significantly improve the economic lives of most middle class Americans. It would give the economy a giant boost by generating increased consumption. It would reduce the need for more government aid to the poor, because the biggest cause of poverty today is middle class people falling into poverty. And it would work to further enrich the already rich who provide what they should be providing — products and services for a thriving middle class.
That’s the solution to the problem. So why do you never hear about it?
Conservatives don’t push it because their own solution involves just further enriching the rich and expecting the middle class to receive a trickled down spinoff. This is actually a pretty go way to go in emerging economies where wealth at top often gets invested in productive realms, but not in our own advanced economy where what isn’t spent by the rich themselves is all too often directed into stock market churning (a.k.a high frequency trading), derivatives gaming, and investing in hedge funds that take gobs of financial flesh from small countries and badly run cities.
Liberals don’t push this simple solution because every solution of their own aimed at addressing middle class angst is linked to other issues and/or selected constituencies — improving infrastructure, disciplining Wall Street, ameliorating problems of the already poor, improving educational levels — all worthwhile objectives, but none that would directly, immediately, and significantly better the economic well-being of most working middle class Americans.
Consider this when it comes to showing how neither liberals nor conservatives, Democrats nor Republicans in Washington really knows, or cares, about the well being of the working middle class. At the beginning of this year, in the wake of the 2012 election, the Payroll Tax rate that had been temporarily lowered from 6.2 to 4.2 percent was allowed to go back up to 6.2 percent without any protest from anyone in a Washington then focused on negotiating a “fiscal cliff” deal.
The 6.2 percent Payroll Tax, sometimes called “The Social Security Tax,” should really be called “the working middle class tax” because that’s the only people who pay it — indeed, almost two-thirds of these working middle class people pay more in this tax than in income taxes.
Some best and brightest in Washington who really cared about the middle class could have at least suggested, SUGGESTED, that all income, earned and incomes, above the present $113,700 maximum taxed be subject to this tax so the working middle class could keep its 4.2 percent benefit.
None did. Not one liberal. Not one conservative. Not one Democrat. Not one Republican. Which says it all about Washington’s best and brightest and their real level of caring for the middle class. Not one of these worthies, it’s worth noting, makes less than $113,700 a year.
Well, that’s it from here. Gotta go. The president is gonna talk more about his own love for the middle class. Who knows. He, too, may one day twig to the obvious. You gotta believe…
(Now available from Amazon in print and ebook formats — Michael Silverstein’s The Devil’s Dictionary Of Wall Street.)