Health Care Reform Signals the End of the Trickle Down Era?

Health Care Reform, End of the Trickle Down Era

As usual, everything that folks fight about in this country usually boils down to one thing: money. All of the fretting and arguing about health care reform is no different.

Republicans say they oppose the bill because government will intrude too much on the lives of Americans. And then there were the scurrilous arguments from Tea Partiers that the legislation would push this country toward a socialist regime. None of those arguments hold weight, but the idea that health care reform will have a huge impact on the distribution of wealth in this country does.

According to the New York Times:

For all the political and economic uncertainties about health reform, at least one thing seems clear: The bill that President Obama signed on Tuesday is the federal government's biggest attack on economic inequality since inequality began rising more than three decades ago.

Over most of that period, government policy and market forces have been moving in the same direction, both increasing inequality. The pretax incomes of the wealthy have soared since the late 1970s, while their tax rates have fallen more than rates for the middle class and poor.

Nearly every major aspect of the health bill pushes in the other direction. This fact helps explain why Mr. Obama was willing to spend so much political capital on the issue, even though it did not appear to be his top priority as a presidential candidate. Beyond the health reform's effect on the medical system, it is the centerpiece of his deliberate effort to end what historians have called the age of Reagan.
Payroll taxes will increase for households earning more than $250,000. For households earning more than $1 million, payroll taxes will jump $46,000 by 2013, according to the Tax Policy Center. Those with incomes below the poverty level will see the most benefit from the bill.

Meanwhile, income for the wealthy has been rising while tax rates have beenhem have been falling, according to the NY Times:

For most of the last three decades, tax rates for the wealthy have been falling, while their pretax pay has been rising rapidly. Real incomes at the 99.99th percentile have jumped more than 300 percent since 1980. At the 99th percentile - about $300,000 today - real pay has roughly doubled...... Since 1980, median real household income has risen less than 15 percent. The only period of strong middle-class income growth during this time came in the mid- and late 1990s, which by coincidence was also the one time when taxes on the affluent were rising.

The health care legislation marks a huge blow at Reagan's push for trickle-down economics -- the idea that economic benefits provided to the wealthy will trickle down to the rest of society. We see what has happened instead. The middle class has been devastated by slow earnings increases, job loss, foreclosures and predatory lending. What trickled down did not help anyone.

Talk about redistribution of wealth in this country and people get violent. The protests over health care became so violent and nasty with people portraying Obama as Hitler and showing up to events with guns strapped to their legs that many felt the president's safety was in jeopardy.

I'm not sure I'll ever understand why. Increasing aid to the middle class will help many Americans of all races. The tax breaks for the wealthy affect a small percentage of homogeneous Americans.

The resistance from ordinary Americans doesn't make sense. They are voting against their own interests. I think they have been poisoned by racism and greed.

Racism because to many in this country, redistribution of wealth means an increase in aid to the poor, who to them, are mostly Blacks and Latinos that don't work hard enough. Of course that's not true, but some people live by the idea that you deserve what you have and that there are no other factors-- oppression, lack of opportunity-- that affect your current life situation.

I remember all of the articles during the height of the recession with people saying: "I did everything right. I went to college and got a job and this is still happening to me."

The other factor is greed. Although more of us fall in to the middle class category and should be pushing for some of the reforms in question, there seems to be this idea that you should be able to make as much as you can in this country regardless of whom it hurts. The belief is that maybe one day I'll be the CEO, making $24 million per year, and I won't want anyone taxing me too heavily. Wake up. Most people will never make that kind of money. I'm not sure anyone should. Is the work of the CEO 60,000 more times valuable than that of the worker who is producing the product?

When he signed the health care legislation in to law, President Obama said it was a "new season" in America. It's about time.