kurt_w wrote:In the medium to long term, though, we're all going to have to pay more taxes, and the richer we are, the more we're going to need to pay.....Jason's reaction is understandable, particularly given that we're still in an economic downturn and that it's hard for the middle class to stomach seeing their taxes raised while the gap between middle-class and rich keeps growing.
I think we have to stop talking about "the middle-class" and "the rich" as if that really describes the distribution of incomes. There is a class divide within what we call "the middle class."
The comfortably middle class have maximum political clout. Policies affect the interests of the lower half of the middle class in completely different ways than households in the $100K to $3M income range. The payroll tax, for instance, is largely irrelevant to the comfortably middle class.
My brother, who is a Mitt Romney sort of guy who manages small companies for investors, is a budget whiz and a budding rich guy. He doesn't live in a fancy house and drive fancy cars, he is "middle class." He *carefully* scrutinizes government policy, and is all over this fiscal cliff deal. He says he will be paying unconscionably low taxes for years to come, which he sees as a disaster for the country.
MOST GOVERMENT LARGESSE FLOWS TO THE COMFORTABLE MIDDLE CLASS, not to the poor, not to people with modest income, and not the very rich. The mortgage interest deduction benefits mostly people with household incomes over $100K. The people with cadillac health care plans that are being subsidized by the Feds mostly have higher paying jobs.
The estate tax exemption was raised to $5M in the deal. This is a gift to households in that $100K to $3M range. Again, it's the comfortable middle class who are off the hook in dealing with the deficit.
The money to sensibly address the deficit is in the middle class, not the very wealthy. I see no evidence that the politicians can take actions that hurt the middle class with good jobs. Obama's politically popular "tax the rich" strategy generates only modest revenue.