President Barack Obama and Senate Majority Leader Harry Reid
Throughout the campaign season, President Obama promised he would be a president for the “middle class” as opposed to the “top 1%.” Part of this promise included giving the “middle class” a tax break.
The immediate problem with this rhetoric is that it is divisive. It buys into the ugly notion that government ought to look out for an arbitrarily defined and faceless “class” rather than protect all of its citizens as unique individuals with rights. Consequently, lumping people into classes and arguing that one of those classes deserves something that the other class doesn’t pits free individuals against each other. This is both destructive and immoral.
But back to the tax cut: it wasn’t just the president who promised this tax break. Members of Congress also claimed they were fighting for the “middle class” as well. During the fiscal cliff negotiations, their Twitter statuses were abuzz with notions of “defending the middle class.”
President Obama on the fiscal cliff: “Preventing [middle class tax hikes] has been my top priority.” — Barack Obama (@BarackObama) December 31, 2012.
"Tonight’s bipartisan vote is a victory for the middle class. Also a victory for President and VP who kept their promise to American people." — Nancy Pelosi (@NancyPelosi) January 2, 2013
"It’s time for the House Speaker to protect the middle class & vote on the Senate-passed tax cut for 98% of families – it will pass the House" — Senator Harry Reid (@SenatorReid) December 21, 2012
"The latest unacceptable Republican offer would mean more pain for the middle class, poor & seniors – and more giveaways to the wealthiest." — Sen. Barbara Boxer (@SenatorBoxer) December 30, 2012
Here’s the kicker: most of the individuals who make up this group that we hear called the “middle class” saw an overall net increase in their taxes under the fiscal cliff package. A USA Today article reported that 77% of Americans will see their tax bill increase under the American Taxpayer Relief Act of 2012.
This tax increase has occurred primarily because the act allowed the payroll tax holiday to rise from 4.2% to 6.2%. This increase in the payroll tax has hit employees across all levels of income, including the allegedly protected “middle class.” It’s been widely reported that it will cost an extra $1,000 per year to individuals who are making $50,000. That’s not an income level any of us would consider “ultra wealthy.” Further, many Americans have already felt the burden of the payroll tax increase upon looking at the withholding section on their paystub. In fact, many of them have tweeted about it.
Unfortunately, tax increases like this happen when myths from D.C. dominate our thinking. Here, the myth is that only some Americans deserve a tax cut. It is wrong on two levels:
1) Attempting to divide Americans into “classes” and then hiking taxes blurs the real fiscal problem. First, before this past tax hike, the wealthiest 10% of Americans already paid 70% of all income taxes. But more importantly, instead of turning up the tax heat on any private citizen, the heat should be turned up on the government for recklessly spending us into $16.4 trillion of debt.
2) The politicians didn’t even protect the individuals in the “middle class” who they promised to protect. They will now pay higher taxes in 2013.
Thus, in the aftermath of the fiscal cliff deal, the lesson to remember for all of us is this: if the government can raise taxes on the “rich class,” they can also raise taxes on the “middle class.” Regardless of how much politicians claim to revere the “middle class,” bringing in extra money for more federal spending is often too hard to pass up.
In this sense, our federal government is indeed no respecter of “classes” so long as it gets to take more money from them.