Young middle class workers are struggling financially, while everyone knows the billionaire class is doing quite well.
The reason is because Washington has insidiously and thoroughly rigged the tax and regulatory system against the working poor and middle class, top-to-bottom, secretly taking and transferring almost all of their economic gains for the past five decades to the billionaire class. And the transfer of wealth begins before working people even see their paychecks in their checking accounts.
The first way government impoverishes the middle class is through racking up a huge national debt. The debt will increase $14,500 per household in 2025 and another $18,300 per household in 2026 and 2027 for each of America’s 131 million households. That’s on top of the $283,000 per household every American family already owes from the $37.1 trillion national debt. It’s a huge burden for the median household, which will gross only about $87,000 this year (the U.S. Census says the median household income was $80,610 in 2023 and nominal GDP increased about 8.5% since 2023).
All of that new debt will be added, or at least will be in motion to be added, before the average American family cashes their first paycheck on the first week of January. And the annual $1 trillion-plus interest payments will place upward pressure on money creation by the federal government in the forms of both currency inflation and credit inflation.
Before that median family receives their first paycheck for the year, while they are awaiting payday, they’ll have paid a highly regressive tax in the form of inflation.
In its most fundamental essence, inflation is a transfer tax from the laborer to real estate barons and the financial industry that work primarily with debt. As an economist, I really don’t need to make a statistical argument that inflation hurts working people; we all know it intuitively when we go into the grocery store or to the gas station. But I’ll outline the argument anyway. Regular price inflation as measured by the Consumer Price Index is a direct result of new money creation by the U.S. Mint and Federal Reserve Bank. It taxes creditors like wage earners, renters and those with checking and savings account deposits by making their dollar-denominated assets worth less.
On the other hand, people who have hard non-cash assets like stocks, yachts, rare art, and commodities are unaffected by inflation. No level of inflation ever sunk a yacht or took a penny of value from a diamond necklace. …
In fact, real estate developers and hedge fund operators typically only pay the capital gains tax, which tops out in most cases at 20% (or 23.8% in some rare cases), and they don’t pay the tax until they cash out of their investments. So while labor has both the 15.3% payroll tax and income tax withholding (plus inflation) deducted from dollar one, before they even see their paychecks, billionaires working with capital keep all their money until they cash out. …
The Federal Reserve Bank dutifully retails the propaganda line that inflation is necessary for a healthy economy. It is, but it’s only necessary for a healthy billionaire vampire economy. Tell anyone infected with this propaganda narrative that prices should tend to fall naturally through deflation as production gets more efficient (as prices did in the U.S. by about 40% from 1800-1913) and you’ll hear some ignorant and panicked propaganda sounding something like “Humina-humina-do-you-want-another-Great Depression?” …
The truth is that you’re not getting your money’s worth. The federal government’s $7 trillion in spending in 2025 means the average household will pay the government $53,400 in taxes and new debt this year alone, with several tens of thousands more in state and local taxes.
Even a poor working family that makes far less than the median income will experience a loss of tens of thousands from their wages, and the purchasing power thereof, transferred every year to government programs subsidizing billionaire real estate developers, big banks and finance, BigAg, BigPharma, the military-industrial complex and health insurance companies. As George Carlin said, it’s a big club and you ain’t in it.
That transfer of trillions of dollars annually from the poor and middle class to the wealthy is the primary reason for the widening gap between the super-rich and the poor and middle class in America, not lower Reagan-era income tax rates still paid by wealthy lawyers, doctors, and salaried software developers. Conservatives and libertarians have long, and rightly, opposed class warfare by the poor against the rich generally. But what should the response be when a select proportion of the super-rich, armed with government crony subsidies and one-sided protective regulations, wage class warfare against the middle class and the poor, perpetually robbing them blind?
That’s an even worse kind of class warfare, and perhaps the very worst kind of class warfare.
Thank you to this author!! Finally, more and more people are becoming aware of how our monopolizer of the means of force is robbing us blind for the purpose of giving it to its cronies. It doesn’t matter which party it is, it seems the cronies are about all the same. They are all getting everything taken from us through the political means. Let’s have some laissez-faire economy, totally without state interference and see how these cronies fare. Perhaps most of them are sponsored by some sort of state dark three letter organization, making some of these people very wealthy. However, this class warfare has to stop, doesn’t it?