Republicans and conservatives have done us a service by describing federal policies in terms of "class war." But by applying the term only to Obama's latest proposals to raise taxes on the rich, they have it all backward and upside down. The last 50 years have indeed seen continuous class warfare in and over federal economic policies.
But it was a war waged chiefly by business and conservatives. They won, as we show below, and the mass of middle-income and poor Americans lost. Obama's modest proposal for tax increases on the rich does not begin a class war. On the contrary, it is a small, modest effort to reduce the other side's class war victories.
Big business and conservatives have worked to undo the regulations and taxes imposed on them in the wake of the Great Depression of the 1930s. Then, an upsurge in labor union organization (the Congress of Industrial Organizations sweep across basic US industries) and in membership in both the socialist and communist parties gave Franklin Delano Roosevelt the support and the pressure to tax business and the rich. He took their money to pay for the massive federal hiring program (11 million federal jobs filled between 1934 and 1941) and to start the Social Security Administration etc. He regulated their business activities to try to prevent devastating capitalist depressions from recurring in the nation's future.
Since the end of the Great Depression - and especially since the 1970s - the class warfare waged by business and its allies (most conservatives in both parties) was successful. For example, at the end of World War II, for every dollar Washington raised in taxes on individuals, it raised $1.50 in taxes on business profits. In contrast, today, for every dollar Washington gets in taxes on individuals, it gets 25 cents in taxes on business. Business and its allies successfully shifted most of its federal tax burden onto individuals.
Over the same period, the tax rates on the richest Americans fell from 91 percent in the 1950s and 1960s, and 70 percent in the 1970s to the current low rate of 35 percent. The richest Americans won that spectacular tax cut. Middle- and lower-income Americans won no such cuts, while paying a higher proportion of their income for Social Security that the rich were required to do.
In plain English, the last 50 years saw a massive shift of the burden of federal taxation from business to individuals and from rich individuals to everyone else. Class war policies, yes, but a war that victimized the vast majority of working Americans.
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