Unequal Equality

The national calls for “shared sacrifice” during these times of austerity presuppose that giant corporations like Goldman Sachs and Exxon Mobil share the same amount of privilege and power as, say, your grandmother.

If the upper one percent has to pay slightly more taxes, say the GOP and some Democrats, including the president, then octogenarians have to say bon voyage to their traditional Social Security and Medicare payments.

It remains to be seen if the GOP is willing to meet President Obama halfway on his plans to tax the wealthy at slightly higher rates. Even if the president did get the GOP to acquiesce in this one area, the lavishly rich would still be taxed at historically low rates (no one is seriously considering going back to Eisenhower’s 91 percent, or Nixon’s 70 percent).

Basically, this is all a fight to go from 35 percent to the Clinton-era 39 percent top marginal rates. A four percent increase simply doesn’t carry the same punch as significantly gutting the social safety net for the poor majority. A single mother of four is going to feel the toll of dwindling food stamps way, way more than a hedge fund manager is going to feel the miniature tax creep — if it happens at all.

Yet, this narrative of “shared sacrifice” — as if all parties are equally sacrificing their means — has fully permeated the national discourse.
~ from Budget Battles Force One-Sided Compromises by Allison Kilkenny ~

In my opinion, Kilkenny has really zeroed in on one of the biggest farces taking place in Washington these days. The playing field is decidedly unequal, yet leaders from both parties magically have decided that all things equal out.

Just to cite one hypothetical example, let's look at the situation faced by a mother and her children on welfare versus any one major corporation. Let's say the mother faces a 10% reduction in her food stamp allotment ($230 reduced to $207). Since the $230 allotment doesn't cover the basic nutritional needs of the family in the first place, could anyone rationally say that a $23 reduction is insignificant?

On the other side, we have a major corporation that might see its tax rate increase by 4 points from 35 to 39 percent. Of course, those figures merely represent the functional rate. Most major corporations don't pay anywhere near that percentage -- several pay zero -- so the actual increase may not equal 4 percent or, if it does, it might increase the rate they actually pay to, maybe, 18 percent.

This is why I entitled this post, Unequal Equality. In theory, it is easy to say that both the mother on welfare and the major corporation (which is probably receiving corporate welfare of one sort or another) are sharing in the sacrifice. But while this mother must accept what is handed down to her without much hope of any mitigation, you can be certain that the corporation will find some loophole or receive some windfall that effectively counters the apparent reduction in revenue.

In other words, the corporation stands a good chance of not seeing an expected reduction at all. Sure, it may pay a wee bit more in taxes, but it will make up the lost revenue in one or more ways.