04/18/2013 03:30 pm ET Updated Jun 18, 2013

Think Again: 'Class Warfare' Revisited

The first time I clicked on this Politico article, titled "Obama, class warrior," I had to check my calendar. Had I forgotten April Fools Day? What else could explain what otherwise struck me as a purposeful -- indeed, expertly executed -- parody of a Politico article?

Authored by Jonathan Martin and John F. Harris, the article "reported" that, "There was nothing especially subtle about the way [President] Barack Obama played the politics of class resentment against [Republican presidential candidate] Mitt Romney in 2012." And the reason for this, they added, was "nothing especially mysterious." Apparently, "class warfare works."

Sadly, it was Tax Day, not April Fools Day. Politico was devoting 2,300 words to this accusation without actually ever addressing the issue of whether Gov. Romney and the Republican Party were also practicing the politics of class warfare -- indeed, without any real attention to the reality of the candidate's proposed policies. That fact means it was intended as a serious analysis, rather than as mere propaganda for the wealthy and their political representatives.

Oddly, the authors do find a Republican operative -- Pete Wehner -- who explains to them that back in the real world, the issue at hand is not President Obama's embrace of the politics of "class warfare," but the fact that Republicans have actually been conducting class war against the poor and middle classes for decades. Granted, he isn't quite that straightforward, but the message is the same nonetheless. According to Politico:

... Wehner, who worked in President George W. Bush's White House, compared the situation to the West Wing conversations he participated in when the Iraq war turned unpopular. "We didn't have a messaging problem, we had a 'facts on the ground problem,'" said Wehner. "And now Republicans have a 'facts on the ground problem' in addition to a messaging problem."

Were the authors to show any interest in these "facts on the ground," they might have discovered, as the Nobel laureate economist Joseph Stiglitz pointed out on the very same day, that:

The richest 400 individual taxpayers, with an average income of more than $200 million, pay less than 20 percent of their income in taxes -- far lower than mere millionaires, who pay about 25 percent of their income in taxes, and about the same as those earning a mere $200,000 to $500,000. And in 2009, 116 of the top 400 earners -- almost a third -- paid less than 15 percent of their income in taxes.

This is just one of many reasons, as Stiglitz notes, that "the share of income going to the top 1 percent has doubled since 1979, and that the share going to the top 0.1 percent has almost tripled, according to the economists Thomas Piketty and Emmanuel Saez."

If you consider the explosion of economic inequality that this country has recently experienced to be as much a fact of life as, say, the weather, then keep in mind that it requires actual actions of men and women to make it so -- similar to, come to think of it, the weather these days. Stiglitz points out that the degree to which the United States has seen this gap widen is unique among advanced industrial nations. And, on the basis of the data, it's not possible to argue that such inequality is necessary to spur economic growth -- that's an ideological assertion if ever there was one. According to the evidence, Germany:

... has managed to maintain its status as a center of advanced manufacturing, even though its top income-tax rate exceeds America's by a considerable margin. And in general, our top tax rate kicks in at much higher incomes. Denmark, for example, has a top tax rate of more than 60 percent, but that applies to anyone making more than $54,900. The top rate in the United States, 39.6 percent, doesn't kick in until individual income reaches $400,000 (or $450,000 for a couple). Only three O.E.C.D. countries -- South Korea, Canada and Spain -- have higher thresholds.

The intricacies of the U.S. tax code, especially the lower tax rates instituted on capital gains and "carried interest" than on earned income, do not interest the authors. They apparently believe that when President Obama "brayed" that Gov. Romney "thinks that someone who makes $20 million a year, like him, should pay a lower [tax] rate than a cop or a teacher who makes $50,000," that the president was playing a divisive campaign trick to get himself elected. They leave no room for the option that, perhaps, President Obama was merely stating a fact.

In fact, as I pointed out in a lengthy examination of Gov. Romney and the Republican proposalslast fall for The Nation, Gov. Romney's economic proposals included an additional $10.7 trillion in tax cuts over the next 10 years, above and beyond the already deeply regressive Bush-era tax cuts, with fully 33 percent directed toward the top 0.1 percent. The fine print called for a reduction in both individual and corporate tax rates, as well as the complete elimination of both the estate tax and the alternative minimum tax. If this had become law, the net result would likely have been that the superwealthy -- those who enjoy an income in the vicinity of $3 million annually -- got to keep an additional $250,000 at a cost of $9 trillion in lost revenue to the U.S. Treasury.

This would have been in addition to the provisions of the "Ryan plan"...

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