Tax Bubbles and Fiscal Cliffs

NY Times blogger Nate Silver is brilliant, his blog FiveThirtyEight should be required reading for voters. I learn more from this column than I did in my 4 years of pursuing a Political Science minor in college.

The fiscal cliff continue to loom tall over the country. Mr. Silver explains a recent proposal that would tax middle to upper-middle class workers more than millionaires. In other words, the tax rate for those making $350,000 would be more than those making $1,000,000. . For example the same worker making $350,000 would be taxed a different percentage for $0-$10,000, 10k-20k, 30k-50k and so on. Apparently this is called a “Tax Bubble”, something new to me, and I imagine many readers out there. Now consider if the tax rate were 35% for 150k-300k and 25% for 1 million and above. This is more then counter intuitive, it defies logic. I would never be able to do justice to the concept in any way close to how Mr. Silver does in his blog. It does illuminate how complicated the tax structure is in America.

On a side note, I find it is hard to imagine that a person making $400,000 a year is being taxed $140,000 a year.  This might sound like more Republican rhetoric, but I assure you I am a Democrat. I am all for taxing the wealthy, but someone making $400,000 a year is not exactly rich, specifically if you live in New York. $400,000 is middle class believe it or not. Policies that hurt those in this tax bracket just hurt small business. This is the income bracket which many small business owners belong. At the very least, “rich” needs to start at over a million dollars. This is not 1955, inflation is out of control.

Relying on the upper-middle class to bear the burden for the country is a brilliant strategy for those of enormous wealth. While the super wealthy shelter their money in tax loop holes and outsourcing, the small business owner has no such luxury. They actually have to pay their taxes. This is precisely the problem with contemporary America, those making $400,000 are seen as rich, even though their percentage of national wealth is trivial when compared with the top .01%. In a relative sense the worker who makes $400,000 a year is closer culturally, and in wealth,  to the bottom 10% as opposed to the top .01%.  The flawed tax structure  is precisely the reason that this middle class demographic votes for the G.O.P, even if they do not agree with any policy EXCEPT the fiscal policy.  The middle class identity crisis is the means by which the G.O.P has amassed the power to attempt to infringe upon the rights of woman and minorities. The middle class vote is being held hostage by a combination of Democratic shortsightedness and Republican opportunism.  Without the upper-middle class vote, the G.O.P. would fade as a powerful political party. A polarized two-party system is a nightmare for people whose vote is cast based on fiscal policy. A viable third party, who runs specifically on a fiscal platform, would create chaos during election season. Here is to hoping for chaos!