I had a Little Golden Book when I was six which told the story of the grasshopper and the Ant. This was no entomological treatise. The Grasshopper in my book, for some reason, played the fiddle while wearing a top hat. He fiddled for the ant who danced to his tune all summer long. Then in the fall the ant began stockpiling food and digging tunnels while the grasshopper kept fiddling. In the first cold snap of winter the ant was fat and happy underground while the grasshopper froze to death while wearing a little scarf.
Clearly the story promotes the stoic perseverance of the ant over the thrill of being a Grasshopper, but ants are mindless, soulless drones. The death of one ant is of no more important to another ant than it is to us humans. At least grasshoppers can become locusts, and although I’ve never been clear on how that happens, it does add an element of dangerous adventure to having a thorax. But the moral of the story book seemed to be that ants keep passbook savings accounts and 401ks while grasshoppers invest in hedge funds. Good little boys and girls want to be ants. But the truth is our heats are with the grasshoppers.
One in five U.S. taxpayers makes less than $17,000 a year – and half of those make less than $11,000 per year. To those in the bottom 20% of our economy savings accounts are little more than a myth. And remember, these are poor folks who make enough to pay taxes. There are grasshoppers worse off than them. The next highest 20% of tax payers average only $22,000 a year income. To families at this level stock investments are something they hear about on TV ads, which is the same way they hear about health insurance. All these folks, 40% of all U.S. taxpayers, are grasshoppers by circumstance.
The true middle income of America is actually $36,400 a year. If you are a single grasshopper and childless you can live pretty well on that income, unless you live in a big city. Grasshoppers in the fourth 20%, who average $59,700 can live comfortably in the big cities, but an offspring or two and they effectively drop down a level – still grasshoppers, if occasionally displaying bursts of ant characteristics.
The bottom 14% of the top 20% of U.S. taxpayers average about $103,000 a year. That is very good money, unless winter should come early in the form of a couple of weeks in an Intensive Care Unit. I.C.U can run through medical insurance limits and then swallow another one hundred grand in less than a month. Even Americans making $100,000 a year are still only one serious illness away from bankruptcy.
The top 1% of all U.S. taxpayers have an average income of $1, 205,000 a year. At one million a year you need binoculars to see bankruptcy. At last our grasshopper can afford to metamorphous into an ant – unless, of course, they invested heavily in WorldCom or Enron, in which case they’re just another grasshopper waiting for winter to pick them off.
Meanwhile 60% of all U.S. corporations paid no federal income taxes from 1996 through 2000. By 2003 the remaining 40% who couldn’t find accountants smart enough, or couldn’t buy a congressman with enough pull to fix the tax code for them and still paid taxes, they supplied just 7.4% of Federal Revenues. That is the lowest corporate share since 1934. Anyone grasshoppers here remember what else was going on in 1934?
Corporate profits in 2003, however, were at all time highs. But despite that golden age of corporate profits, very quietly in October of 2004, without any fanfare and almost no press coverage The Republican Congress passed and George Bush signed into law a new business tax code that cut corporate taxes by a further $177 billion dollars a year. Does this seem wise, Grasshopper?
Also in 2003 the U.S. government took in $1.85 trillion in revenues, 92% of it from the pockets of individuals, in the form of personal income taxes. Unfortunately, at the same time the Republican congress and president spent $2.39 trillion.
As of midnight, December 1st, 2005 our national debt was $8, 107, 096, 961,245.23. By midnight December 2nd it will grow by almost another three billion dollars. Your personal share of that debt, grasshopper, is $27,218.23. To pay that debt right now, before it grows any higher, would leave the middle of the middle class grasshoppers in America with just $8,181.77.
And nobody can live on that.
Part One of Three Parts.
