The Wall Street Protests and the 53%

These are two sides to the economic crisis. First you have the protesters who appear to have a vague understanding that something is wrong. They’re calling themselves the 99% and are trying to call attention to the ongoing wealth disparity in this country.

I agree with them whole heartedly that the disparity is approaching crisis proportions. Unfortunately the message is getting garbled.

On the other side is the conservative counter which labels itself the 53%. The name comes from the fact that some 47% of the population pays no income taxes. Conservatives have been posting their stories on a web site. The stories, typically, portray what I’ll call good old perseverance and hard work. Stories of people that have succeeded despite hardships and disadvantages without asking anything from anyone.

I’m not going to take anything away from these people. They have a right to be proud of what they view as their success in the face of adversity. They view the protesters as whining and looking for handouts rather than putting in the necessary effort to succeed.

To some extent they are correct. But they overlook a number of things. First of all, if they look a little deeper into their success they will find that even though they didn’t overtly ask for help, it was most likely there in the form of government regulations and subsidies.

Second, they don’t realize that it shouldn’t have been as hard as it was. It’s the disparity of wealth and the pure greed that seems to be endemic in society today that has made it such a struggle for so many people including themselves.

Third, and most important, to a lesser or greater extent they’ve been lucky, but there is no guarantee that luck is going to hold. Again, I do not want to disparage their accomplishments, but, in many cases, it’s a lot more fragile than it looks. Overnight their success can change to failure through no fault of their own and that’s the problem.

Now let’s talk about the 47%. According to a Brookings Institute and Urban Institute report, about half of these people pay no tax simply because their liability is eliminated due to the standard provisions of the tax system. These are the same rules we all adhere to. The overwhelming majority of the other half end up with no liability due to tax expenditures for the elderly and the working poor many of which were part of the Bush Tax Cuts.

In other words we’re not talking about people given special privileges here. These are either retired folks who worked their whole lives and the working poor who are doing the best they can. The conservative idea that these people are freeloaders is horseshit.

Let’s also remember that they do pay payroll taxes and state and local taxes. In fact, as shown in the graph, there isn’t a big difference between the percentage of total income and the percentage of total tax liability for the various income groups.



However this graph points out two problems. The first is that 1% of the population should not have 21% of the income. The second is the tax liability should be more progressive with the tax burden increasing faster than it does compared to the income percentage. These are the two primary things the Wall Street protesters need to focus on.

So, as usual, the conservatives have a distorted view of reality. So what else is new?