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The Occupy Wall Street protesters are looking more and more like the shock troops of the Democratic Party’s electoral tactic of class warfare. Responding to a question about the protesters, the President gave an oblique endorsement when he said, “The American people understand that not everybody has been following the rules; that Wall Street is an example of that.” That would be the same rule-bending Wall Street from which his 2008 campaign received more money than any other politician in history. Forgetting that largess as he demonizes the rich, the President now wants a 5.6% surtax on millionaires, which would include not just Wall Street fat cats, but small businesses on Main Street. Certainly organized labor also thinks they can use the protesters, which is why some labor groups––particularly public employee unions hooked up to diminishing taxpayer-funded life support––are marching alongside them, in the hopes that they can exploit this movement to protect their Cadillac benefits.
The protesters themselves comprise the usual suspects: badly educated young people (“Students loans=indentured servitude,” read one sign), aging hippies, leftover leftists (“Marx Was Right,” read another), and the purveyors of various wacky conspiracy theories, like the guy whose sign links the Federal Reserve to the pyramid on the dollar bill. This mélange explains the profound ignorance of economic reality that lies behind the protesters’ complaints about the “greed and corruption of the 1%.” In this melodrama, “Wall Street” and “corporations” have rigged the system so that they enrich themselves at the expense of everybody else. “Growing income inequality” is the proof of this nefarious behavior, as the left-wing magazine Mother Jones reports: “A huge share of the nation’s economic growth over the past 30 years has gone to the top one-hundredth of one percent, who now make an average of $27 million per household. The average income for the bottom 90 percent of us? $31,244.” Q.E.D.
What Mother Jones leaves out, of course, is some facts I’ve brought up before about the same period. In 1981, the top 1% paid 17.58% of all federal income taxes; in 2005, this same cohort paid 39.38%. In 1981 the top 1% paid $94.84 billion (in 2005 dollars); in 2005 they paid $368.13, an increase of 288%. In the most progressive tax system among OECD economies, today the top 10% of American taxpayers pay 70% of all revenues, while the bottom 47% pay nothing. In other words, this increasing “income inequality” has led to the rich footing most of the tax bill for all the goodies the federal government dispenses. Contrary to the current class-warfare rhetoric, “If you want to get more tax revenues from the rich,” economist Arthur Laffer points out, “you’ve got to make the rich richer, and to make the rich richer, you’ve got to lower tax rates.” If the “anarchists for Big Government,” as Mark Steyn calls them, really want more federal money for their demands like “free college education,” “a $20 minimum wage,” and a trillion dollars for “ecological restoration,” they should be endorsing supply-side economics.
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