Convention hoopla aside, it probably won’t be clear until the final days of the presidential election campaigning which candidate will win. That’s mainly because the broad band of beleaguered middle-class voters who will determine the outcome of the election are often guided more by their emotional and aspirational values than by their pocketbook realities.
If the recent decades of ongoing shrinkage of middle-class Americans’ inflation-adjusted income and rising health care insecurity were the guideposts, that wouldn’t be the case. Given those trends, voters surely would reject the troubling GOP path of shifting an increasing percentage of national income to a small elite, and paying for those policies by effectively whacking incomes and earned entitlements for the mass of American families and workers.
Recent studies confirm the long domination of these destructive trends. A comprehensive new study by the nonpartisan Pew Charitable Trust, for instance, finds that middle-class American families have suffered a decadelong fall under Republican policies and global employment shifts. The percentage of middle-class Americans has shrunk, and those left in that category have experienced declines in inflation-adjusted income and accumulated wealth, and in optimism for the future. At the same time, a vastly smaller band of very affluent to super-rich citizens has enjoyed sharply rising incomes and wealth. Though Pew doesn’t say so, those outcomes reflect inequitable tax policies and needless off-shoring of jobs to boost corporate fortunes.
An new analysis by the Institute for Policy Studies shows the striking irony: ordinary taxpayers essentially subsidize the huge tax loopholes that let the nation’s richest 1 percent and corporate CEOs take home annual megamillion compensation packages – including pay packages that often exceed the tax payments made by their companies.
The “carried interest” rate of 15 percent on capital gains and dividends – rather than the top income tax rate of 35 percent – lets billionaires and megamillionaires like Mitt Romney pay a far smaller percentage of their income in federal taxes than many Americans in the upper-middle-class range. Corporations, as well, get to write off the value of these compensation packages, just as they do other costs of business. This loophole, the study reported, allowed 26 CEOs to receive more in annual compensation in 2011 than their companies paid in taxes. The four major loopholes involving executive pay, the study said, cost taxpayers $14.4 billion last year.