Class Warfare and the Need to End Income Inequality

Republicans do a clever job of manipulating the English language to achieve an intended psychological effect.

For example, the GOP's incessant, derogatory references to the word "liberal" so thoroughly tainted its meaning that liberals were forced to abandon it, and now use the word "progressives" in its place.

Also, Republicans have recently been making clear that the term "class warfare" is clearly unacceptable. That's not surprising since Republicans protect and defend the rich and wealthy corporations, entities that have the most to lose if class warfare were to break out.

Of course, when I say class warfare, I don't mean the use of violence or physical assaults upon the wealthy. I mean the middle class and the poor standing up for their rights.

And they have many reasons to feel aggrieved.

Frank Rich wrote recently in the New York Times, "The top 1 percent of American earners took in 23.5 percent of the nation's pretax income in 2007 -- up from less than 9 percent in 1976. During the boom years of 2002 to 2007, that top 1 percent's pretax income increased by an extraordinary 10 percent every year... in that same period, the median income for non-elderly American households went down and the poverty rate rose."

If we think of the wealth of America as an economic pie, then the bigger the slice taken by the affluent, the less left for poorer folk.

However, the standard Republican argument in response is that large fortunes amassed by the wealthy have no harmful effect on the middle and lower classes. Quite the contrary, they say, those at the lower end of the income scale benefit from other's wealth.

Roger Lowenstein recently wrote in the New York Times, "The millions made by hedge-fund traders, or by entrepreneurs who founded companies like Google, don't diminish other people's wages. Indeed, each helps to make the pie bigger."

Thus, Lowenstein implies that everybody can be happy. When the rich get richer, the incomes of the middle class and poor rise, too. So, class warfare is unjustified. We should protect the well-to-do's fortunes, not attack them.

Well, let's look at the evidence. Supposedly, according to the GOP, money made by rich capitalists will "trickle down" to those lower in income. The wealthy use their money to expand their businesses and, in the process, create more well-paying jobs.

In fact, Republican word conjurers no longer call rich people "rich;" we are told to refer to them as "job creators." (muffled laughter)

The problem with this theory is that like most theories it oversimplifies the situation; reality is more complex than that.

If you are a moneyed person, you are not compelled to expand your business and hire more Americans. First, you can hold onto your money and just collect interest on it. As Rich wrote in the Times, "American companies seem intent on sitting on trillions in cash until the economy reboots."

Second, you can invest in foreign securities. No help for Americans there.

Third, you can indeed expand your enterprise and hire more people -- but do it in faraway lands where you hire foreign workers. No help for Americans there, either.

So, it isn't inevitable that money held by wealthy people will trickle down to poorer ones. As former Colorado congresswoman Patricia Schroeder said, "Is money trickling down? Look, I haven't even got damp yet."

Well, what then can be done to lessen income inequality between rich and poor?

Warren Buffett, the Oracle of Omaha, who is a billionaire and chief executive of Berkshire Hathaway, has some ideas.

"While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks," he once said.

(The top 1 percent of Americans now have tax rates a third lower than they had in 1970.)

"But for those making more than $1 million -- there were 236,883 such households in 2009 -- I would raise rates on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more -- there were 8,274 in 2009 -- I would suggest an additional increase in rate."

This tax money could be used to stimulate the economy and create jobs, say through badly-needed infrastructure improvements.

How do Republicans in Congress feel about Buffett's ideas? Not very positive. A huge majority of them have signed Grover Norquist's pledge to never, under any circumstances, increase taxes, most particularly on the wealthy whose money, they feel, must be protected.

And so the rich remain rich. The poor remain poor. And congressional Republicans refuse to budge on taxes.

This stalemate will continue until middle class Americans conduct "class warfare" and demand through the ballot box that they no longer be excluded from the American Dream.