TRUTH BE TOLD
We can look at it from a different perspective. When income grows, who gains? According to the Economic Policy Institute, income in the U.S. grew from 1945 through 1980 by an average of $19,080. Of this growth, 65 percent went to the bottom 90 percent of wage earners.
Now, let’s see what effect the Reagan tax cuts had on the distribution of wealth. Looking at 1981 to 2008, incomes grew, on average, by $12,189. Of this, only 4 percent went to the bottom 90 percent of wage earners.
The income tax cuts, particularly for high-wage earners, have had a tremendous effect on government revenues as well. New York’s governors started cutting state taxes in the mid-1990s. According to the Fiscal Policy Institute, if New York were at the early 1990s tax rates now the state would have $13.5 billion more in revenues this fiscal year.
That would go a long way toward resolving our current budget deficits.
Not only are these revenues lost, but the surcharge put in place on the wealthiest New Yorkers is scheduled to expire December 31 of this year, and Gov. Andrew Cuomo wants to let it expire and give the wealthy a tax cut.
New York’s tax structure already favors the wealthy. Right now, the wealthiest 1 percent of New Yorkers (who make more than $633,000 annually) pay 8.4 percent of their income in state income taxes and local property taxes. The governor wants to cut this to 7.2 percent.
Meanwhile, all of us in the bottom 95 percent of taxpayers pay an average of 10.58 percent of our income.
The only way to get back to the good old days of the pre-Reagan years is to have a fair tax structure and a vibrant labor movement. Without change, we will continue to slip into some Dickensian nightmare.
We will know in the next few months whether New York will rebel against this obscene narrative and force the wealthy to pay their fair share, or the assault on the beleaguered middle class will continue.
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