As Matthew Goldstein and Jennifer Ablan report for Reuters, many of the people who work on Wall Street are in denial or simply befuddled about why they are on the receiving end of so much vitriol. Let’s start with a simple fact.
In New York City, the average pay for those working in finance is $361,183, more than five times the average salary of $66,106 for all workers in the city, according to the New York State Department of Labor.
Those making $361,183 a year are in the highest marginal tax bracket. Now, let’s move to another fact.
[The Bush tax cuts] are a defining issue at the heart of the broad ideological argument between the two parties. They were central during the 2010 elections, and they will again be central in 2012. They are a key cause of our current fiscal problems, and now they’re at the center of the supercommittee’s likely failure to do anything to solve those problems.
They are at the center of the GOP’s supercommittee’s demands; indeed, keeping them in place is one of the primary motivations driving the current overall conduct of the Republican Party.
The supercommittee is, of course, charged with trimming $1.2 trillion from the federal budget over the next ten years. As of today, they are going to fail to come to any agreement over those cuts, largely because the Republicans insist that the people in the highest tax bracket not have to share any of the cost or burden of those cuts. Instead, they want people to work longer before they are eligible for Medicare, and the want to reduce the value of people’s Social Security checks by tweaking how the cost of living adjustment is calculated. They want to slash money for Medicaid. And they want to trim money from programs that help people in need.
These facts alone explain why people are growing angry with the most affluent people in our country. But these facts are only the tip of the iceberg. We haven’t even considered why we need to make such drastic cuts in our budget. The tax cuts are one of the biggest reasons our deficit just exceeded $15 trillion. But we also launched a war in Iraq that wasn’t paid for and that had no justification. We mismanaged the war in Afghanistan, and didn’t pay for it either. We passed a prescription drug benefit for Medicare that was needlessly expensive because it didn’t allow for negotiated prices for bulk purchases. And it wasn’t paid for either. Everything has been getting put on the nation’s credit card and now there is a gigantic bill to pay with lots and lots of interest.
The revolt is largely over who should pay that bill. Should it be old ladies on a fixed income? Should it be construction workers who have to work two more years of hard labor before qualifying for Medicare? Should it be college students who have less access to college grants and loans? Or should it be the most affluent among us who have not only been growing wealthier as the rest of us grow poorer, but who work in an industry that is responsible for destroying many millions of our jobs and much of the value of our retirement accounts?
On some level, this debate gets clouded by an argument about how best to create economic growth. The Republicans argue that people in the highest tax brackets are also the people most likely to create new jobs. Let them keep more of their money and they’ll use it to invest and expand their businesses; take more of their money and none of the job creation will occur. It’s a mistake to even engage in that debate. The proper question is “who is responsible for this credit card bill?” Who ought to pay the bill?
For the last decade, the most affluent people in this country have been enjoying a massive tax break. And they got much richer as a result. They need to pay the bill. And, as long as they use the Republicans’ power to obstruct to avoid paying their fair share, they are going to see the people’s wrath grow and grow and grow.
