The Rich are Profiting Like It's 1929

We're being sold a bill of goods, people.

By Donald Kaul

No wonder the American people are confused — about the economy, the nation, the Middle East, the onrushing election, and everything else. People keep feeding them bad information.

For example, how many times have you heard a commentator say that the mess in Washington is the fault of both parties because neither party will compromise? I'm guessing…many.

It's not true, not even a little bit.

Democrats have stood ready to compromise on pretty much every issue that's come before them in the past two years. Tax cuts, social security, military spending, immigration, school lunches — you name it — Democrats have been willing to take half a loaf, or even a quarter-loaf. That's what Democrats do.

It's Republicans who have been unwilling to give an inch on taxing people we call, for want of a better name, rich. The only reason anything at all has gotten done over the past year is that Democrats have caved in to Republican demands, like extending the now-famous Bush tax cuts.

Ah yes, the Bush tax cuts. There was a reason they were scheduled to go away after 10 years. Any longer than that would break the budget, it was said when they were enacted.

But when the decade was up Republicans went back on the deal, refusing to countenance "a job-killing tax hike," and that's where we've been ever since.

Never mind that President Barack Obama's deficit plan limited the restoration of taxes only to higher incomes, and balanced that with cuts in social welfare programs dear to Democrats' hearts. (In other words, a compromise.) Higher taxes of any kind were and are a no-no for Republicans. Democrats will compromise, Republicans won't.

Does that mean that all our troubles are the fault of the Republican Party?

Yes.

OK, maybe not all of our troubles. Democrats get big money from the same people who fund the Republican Party, after all, but Republicans are the main impediment to getting out of the hole we're in.

And compromise isn't the only subject the public is getting bad information about. There are taxes, for example.

Supposedly we have the highest corporate taxes in the industrialized world and they are crushing our economy. Nonsense.

During the past quarter, corporations paid out 21 percent of their profits in taxes (as opposed to the theoretical 35 percent conservatives are always woofing about). In the past 50 years, through good times and bad, that rate has amounted to just under 34 percent.

So our corporations are being taxed at about two-thirds of what they have been taxed at historically. Not so high.

But what about personal taxes? Surely they're way high.

They're not. For the recent quarter, personal taxes —federal, state, and local — were estimated at 14.1 percent of income. The 50-year average is 15.5 percent, 10 percent higher.

In addition, the latest figures show that after-tax profits of corporations make up 10.3 percent of the economy — the highest they've ever been.

The next highest was the 8.98 percent achieved in — you guessed it — 1929, a year you don't want to be compared to.

So what does this all mean?

It means we're being sold a bill of goods, people. We are being systematically lied to so the upper tenth of 1 percent of the population, which funds our elections and pays off our politicians, can get ever richer.

Our environment, our school systems, our social safety net, our public works, and our middle-class prosperity are all being sacrificed to make the richest richer.

This isn't a new phenomenon. In 1896, a great American put the case before the Democratic National Convention in a famous speech. He said:

"There are those who believe that if you will only legislate to make the well-to-do prosperous, that their prosperity will leak through to those below.

"The Democratic idea has been that if you make the masses prosperous, their prosperity will find its way up and through every class that rests upon it."

Where is William Jennings Bryan when you need him?