Democratic Governors in California and New York Looking to Put Final Squeeze on Middle Class
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A bit over a half century ago, in the years right after World War II, the United States delivered up onto the global stage something the world had never before seen: a mass middle class.
For the first time ever, a majority of a major nation’s people had “disposable income” -- real money left over after paying for basic food and shelter.
Two states, New York and California, would serve as geographic bookends to this colossal achievement. The duo offered “ordinary people,” as historian Kevin Starr has chronicled, lives unimaginable anywhere else in the world.
Activist government made those lives possible. Government-subsidized loans raised new middle class suburbs from potato fields and sugar beet acres. Tax dollars funded new infrastructures in energy, water, roads, schools, and parks.
“California’s children, swarming on all those new playgrounds, seemed healthier, happier, taller,” as Atlantic editor Benjamin Schwarz has noted. “A sweet, vivacious time.”
A time we may never see again. The two newly elected governors of New York and California, both Democrats, have essentially declared America’s mass middle class ancient history.
Both governors, Andrew Cuomo in New York and Jerry Brown in California, are now pushing “a fundamental realignment” that goes beyond the budget cutbacks that have become a grim annual state capital routine all across the nation.
Both are attacking the foundational core of America’s middle class golden age, the notion that the public policies we choose, the public goods we provide, can create better lives for ordinary people. Instead, both are pushing their respective states to abandon those public goods — and coming down hard, with wage cuts and layoffs, on the public employees who provide them.
A half century ago, back in our middle class golden age, no public good meant more to Californians than their remarkable system of public higher education. Every California high school grad had access to free community college. High-achievers attended, at tiny tuition rates, some of the world’s finest universities.
The governor who signed the 1960 law that created this magnificent higher ed network? Jerry Brown’s father Pat. Now today, under the budget plan son Jerry is avidly promoting, revenue from student fees will exceed the state government contribution to higher education -- for the first time in California history.
Brown says he has no alternative.
“This is the world we live in,” Brown has pronounced. “You can’t manufacture money.”
But governments can raise revenue by taxing their most affluent. Back in America’s middle class golden age, that’s what governments did.
Brown is refusing to go down that road. He does want to continue a set of temporary tax hikes put in place before his election. But these hikes -- 1 percent in sales tax, 0.5 percent for vehicle licenses, 0.25 percent across the board on the state income tax -- all fall heavier on middle- than high-income Californians.
In New York, Andrew Cuomo isn’t willing to raise taxes on the rich at all. His rationale for that refusal?
“The working families of New York,” Cuomo says, “cannot afford tax increases.”
What does what working families can afford have to do with taxing the rich? Cuomo defines “working families” to include the wealthy. Explains Cuomo: “They work, too.” Indeed they do. But under current law New York’s wealthy actually spend less of the income in state and local taxes than ordinary New Yorkers.
New Yorkers making between $33,000 and $95,000, analysts Chloe Tribich, Sunshine Ludder and Ron Deutsch pointed out last week, pay 11 percent of their incomes in state and local tax. New York’s richest 1 percent -- taxpayers making over $633,000 -- only see 7 percent of their incomes go to state and local taxes.