People's History of the United States_ 1492 to Present, A - Zinn, Howard [345]
This suggested that both parties were trying to manufacture an antihuman-needs mood by constant derogatory use of the word “welfare,” and then to claim they were acting in response to public opinion. The Democrats as well as the Republicans had strong connections to wealthy corporations. Kevin Phillips, a Republican analyst of national politics, wrote in 1990 that the Democratic Party was “history’s second-most enthusiastic capitalist party.”
Phillips pointed out that the greatest beneficiaries of government policy during the Republican presidencies of Ronald Reagan and George Bush were the superrich: “It was the truly wealthy, more than anyone else, who flourished under Reagan. . . . The 1980s were the triumph of upper America . . . the political ascendancy of the rich, and a glorification of capitalism, free markets, and finance.”
When government policy enriched the already rich, it was not called welfare. This was not as obvious as the monthly checks to the poor; it most often took the form of generous changes in the tax system.
In America: Who Really Pays The Taxes?, two investigative reporters with the Philadelphia Inquirer, Donald Barlett and James Steele, traced the path by which tax rates for the very rich got lower and lower. It was not the Republicans but the Democrats—the Kennedy-Johnson administrations—who, under the guise of “tax reform,” first lowered the World War II–era rate of 91 percent on incomes over $400,000 a year to 70 percent. During the Carter Administration (though over his objections) Democrats and Republicans in Congress joined to give even more tax breaks to the rich.
The Reagan administration, with the help of Democrats in Congress, lowered the tax rate on the very rich to 50 percent and in 1986 a coalition of Republicans and Democrats sponsored another “tax reform” bill that lowered the top rate to 28 percent. Barlett and Steele noted that a schoolteacher, a factory worker, and a billionaire could all pay 28 percent. The idea of a “progressive” income in which the rich paid at higher rates than everyone else was now almost dead.
As a result of all the tax bills from 1978 to 1990, the net worth of the “Forbes 400,” chosen as the richest in the country by Forbes Magazine (advertising itself as “capitalist tool”), was tripled. About $70 billion a year was lost in government revenue, so that in those thirteen years the wealthiest 1 percent of the country gained a trillion dollars.
As William Greider pointed out, in his remarkable book Who Will Tell The People? The Betrayal of American Democracy:
For those who blame Republicans for what has happened and believe that equitable taxation will be restored if only the Democrats can win back the White House, there is this disquieting fact: The turning point on tax politics, when the monied elites first began to win big, occurred in 1978 with the Democratic party fully in power and well before Ronald Reagan came to Washington. Democratic majorities have supported this great shift in tax burden every step of the way.
Not only did the income tax become less progressive during the last decades of the century, but the Social Security tax became more regressive. That is, more and more was deducted from the salary checks of the poor and middle classes, but when salaries reached $42,000 no more was deducted, By the early 1990s, a middle-income family earning $37,800 a year paid 7.65 percent of its income in Social Security taxes. A family earning ten times as much, $378,000 paid 1.46 percent of its income in Social Security taxes.
The result of these higher payroll taxes was that three-fourths of all wage earners paid more each year through the Social Security tax than through the income tax. Embarrassingly for the Democratic party, which was supposed to be the party of the working class, those higher payroll taxes had been put in motion under the administration of Jimmy Carter.
In a two-party system, if both parties ignore public opinion, there is no place voters can turn. And in the matter of taxation, it has been clear that American citizens have