Organizing for America | Chris Casarez's Blog: The Trickle-Down Non-effect

The Trickle-Down Non-effect

By Chris Casarez - Sep 21st, 2008 at 12:25 am EDT

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Tags: economy, income distribution, McCain, middle class, Obama, povery, rich, Taxes

Time and again I hear it from my own friends (most of whom are in the same income bracket as myself) that taxes are the problem, the source of our inability to own houses, despite our ambitioius work ethic, and that lowering taxes on the upper percentiles will trickle down and benefit the rest of us. The logic sounds great on paper, except that in practice it's not true.

It's not our taxes that make it difficult for us, but the fact that working class incomes have stagnated over the last few decades, and have been outpaced by our cost of living. The living wage jobs of yestercentury have largely been replaced with jobs that leave Americans living paycheck to paycheck. America has become far richer and more productive, but most of the economic gains have only been realized by the top 1% or so.

In other words, this expectation has shown to be wrong, as the wealth continues to not trickle down, but rather coagulate at the very top (it's worth mentioning that we have the largest disparity in wealth of any industrialized nation--read more here and here). As the graph below (taken from Paul Krugman's blog) shows, we are essentially back to the gilded age in terms of wealth disparity. The solution is not "more tax cuts on the rich," as even conservatives like Ben Stein acknowledge (read his article You're Rich? Terrific. Now Pay Up and watch him argue his point on Fox News). Rather, the lack of wealth distribution has taken us back to a time before a tangible middle class even existed.

Today, the phrase "wealth distribution" strikes a chord in many if not most Americans. In their minds, it wreaks of socialism, which wreaks of communism, and we all 'know' communists are nihilistic vampires that want to do away with free will once and for all. In sum, conservatives have played off of our vestigial cold war fears to wedge their laissez faire ideals back into the mainstream.

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