Say “No” to Conservative Class Warfare

by Sal on November 21, 2008

in Economy,Politics

There is a movement of “reformers” within the Conservative movement who want to target Conservative policies to the middle-class.  Ramesh Ponnuru at National Review is one of them.  I don’t have a problem with coming up with ideas that benefit the middle class, but it should not turn into class warfare.  Ponnuru, I feel, is taking the class warfare route, and narrowly defining the middle class.

In a post over at The Corner, he criticizes a plan put forth by Newt Gingrich and Peter Ferrara, which aims to reduce the 25% tax bracket to 15%, so that the tax bracket up to $131,000 / yr. would be 15%.  Only after $131,000 would there be a huge jump to 28%.

I personally think that is a great idea.  Even though it targets the middle class, it also affects ALL taxpaying Americans who make more than $61,000 / year, as the tax brackets are progressive (i.e. everyone pays 10% on their first $16,000 of income, then 15% on income earned from $16,001 to $61,000, etc.)

Ponnuru attacks the tax plan because of this, because it would give a tax break to the wealthy.  In criticizing the plan, Ponnuru states:

First of all, the vast majority of tax filers don’t hit the 25 percent tax bracket, so this proposal is upper-middle-class tax relief at best.

Second, keep in mind that it is not just the middle class that pays the 25 percent rate. Under our tax code, a couple is in the top tax bracket, for example, pays 10 percent on its income up to $16,000, 15 percent on the next chunk of income up to $65,000, 25 percent on income up to $131,000, and so on. What this means is that most of the money that the 25 percent tax rate raises for the federal government is not taxed at the margin. Cutting that rate will lower tax payments for many affluent people without changing their incentives at all. For them, the tax-rate cut has the same effect as giving them a tax credit. The federal government would lose a lot of revenue without much reducing the tax code’s distortion of American life.

I wholeheartedly disagree with this logic, and am offended by some of its assumptions.  To say that any family making $80 or $90,000 in the northeast is “upper-middle class” is a distortion of the reality of New England/New York life, and completely untrue.  Geography and cost-of-living plays a part in what socio-economic status one finds oneself in.  The price of real estate alone makes Ponnuru’s claim absurd on its face.

Second, Ponnuru sounds a lot like liberals engaged in class warfare.  To propose a child tax credit alone, without regard to other people’s burdens, sounds an awful lot like Obama’s plan.  While I am not opposed to any tax cut on its face, to use the class-warfare arguments of the left, as well as defining normal, middle-class Americans as “upper-middle class” engages in rhetoric that is the antithesis of what the Conservative movement stands for — equal opportunity for all Americans.  Ponnuru misses this point, and ignores the plight of us middle-class New Englanders who are soaked with high taxes and a high cost of living, and would like a bit of a tax break too.

UPDATE: Welcome NRO Corner readers.  To respond briefly to Ramesh’s rebuttal to my post, the Census Bureau does not take into account geographical differences in cost-of-living.  What may be middle-class in Nebraska is not the same as middle-class in Massachusetts, New York, or California.  Ramesh just happened to hit on a pet-peeve of mine, the throwing around of the term upper-middle class to describe those in more urban areas of the country who make decent yet by no means affluent wages.  I take the idea of middle-class to be much broader than what Ramesh states it is, and even the Census bureau itself says that they have no official definition of the middle-class.  Appealing to the middle-class is important as is appealing to all income brackets, but I think Conservatives need to avoid identity-politics, and this is bordering on that.

While Ramesh may be right in what he has said in the past has been against class warfare, his arguments above do seem like class warfare, intentional or not.  I don’t think his rebuttal argument holds water, but then, what do others think?  I’d love to hear other opinions.

Leave a Comment

You can use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Previous post:

Next post: