Home > Political Ranting > The Assault on the Middle Class Continues

The Assault on the Middle Class Continues

August 21st, 2004

In their continued attack against the middle class, the GOP and President Bush ponder how they will institute a national sales tax, probably at around 25%. The anti-progressive tax would, in theory, replace the federal income tax, and would represent the greatest tax cut for the wealthy imaginable, a veritable Death Star for tax cuts for the rich. It would shift the tax burden squarely on the middle class and the poor.

Bush and the GOP are already spinning like mad, giving the new plan the name “Fair Tax” and claiming that it would make the middle class “invisible” to taxes. Invisible?? When you pay 25% extra on everything you buy? In addition to whatever state sales taxes you might pay?

The GOP stance is an absolute fraud, pure and simple. Wealthy people would be paying a miniscule proportion of their income for the tax–and would likely be rewarded immediately with big-ticket exemptions (under the guise of aiming those exemptions at the middle class, of course–SOP). The poor would find their tax burden skyrocketing, as just about everything they purchase would become about 25 % more expensive–including food, which for obvious reasons has always been exempt from state sales taxes. Everyone in the middle class would suffer similarly.

The idea has been so unpopular that Bush almost immediately flip-flopped on the issue, saying he didn’t want people to think he was raising taxes. No, we’ve got to get those tax hikes through in stealth mode.

This is a seriously bad idea–not just for the above reasons, but because it will target taxes at purchases, which will hurt sales and be poison to the economy. Japan instituted a 3% federal consumption tax back in 1989, and hiked it to 5% in 1997–and both times, their economy dragged, contributing to a decade-long recession.

On another front, the Bush administration, after losing four congressional votes on the issue, decided to use strict executive authority to enact their overtime overhaul. Republicans are trying to paint it as something that will just take overtime away from a few thousand wealthy people earning over $100,000 a year, and that a lot of other people will get more overtime. Few people getting overtime now believe this, however.

One thing is for certain: it’s not what the Bush administration wants you to think. First of all, how many people who make over $100,000 a year get time-and-a-half? Like the law that says that rich people have the right to sleep under bridges, one can only suspect that this is a false-front way of making it look like a burden only on the wealthy.

Workers earning less than $24,000 will be exempt, but that leaves a huge hole between $24K and $100K, occupied mostly by the middle class. Who in that hole will lose overtime? That’s the problem: the rules are torturously labyrinthine in that area, and even experts say they’re unclear. Some examples of people getting their overtime pay cut include “pharmacists, funeral directors, embalmers, journalists, financial services industry workers, insurance claims adjusters, human resource managers, management consultants, executive and administrative assistants, purchasing agents, registered or certified medical technologists, dental hygienists, physician assistants, accountants, chefs, athletic trainers with degrees or specialized training, computer system analysts, programmers and software engineers.” See the pattern? No? What, are you blind? Obviously the pay cut is aimed at.. er,… uh, whah?

And what if your job is not on that list? Does your pay get cut, or not? You’ll probably find out when your employer cuts your pay–the rules are so unclear that they say employers should determine who gets the cuts on a “case-by-case basis.”

Now, the claim is that this is intended to cut down on lawsuits concerning overtime pay, but this is doubtful: the vague and seemingly random targeting of the pay cuts will, in all likelihood, create countless more disputes and spark a tidal wave of suits. The real aim of the law, it would seem, will be to cut down on the chances of employees actually winning the overtime claims so many businesses despise.

The fact is, the rules confuse a great many people, but many distrust the new regs on the basis of its source–the anti-labor administration–and its backers, the people who pay the wages:

Monday’s change is the culmination of decades of lobbying by business groups representing retailers, restaurants, insurance companies, banks and others that have been hammered by workers’ overtime lawsuits, many of them successful.

I can relate to that. When I worked at a movie theater in college, my own employers withheld overtime pay, claiming they just didn’t have the money for it (businesses never ‘have the money’ to pay employees), and promising future redresses that of course never materialized. I sued them in small claims court, and won.

I would be willing to bet good money that far, far more than the 107,000 workers will lose overtime, and apart from savaging middle-class wage earner’s income, this stands as the first step of many to do away with overtime completely.

Add to this the refusal of conservatives to allow for even a mild increase in the minimum wage, and their incessant drive to give more, more, and even more tax cuts to the wealthy, and it becomes all too evident that the GOP is the friend of the wealthy only, and has nothing but contempt and abusive intent towards the poor and middle class.

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  1. GMH
    September 6th, 2004 at 13:36 | #1

    You are so confused…where do you get your information from?

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