Framing Middle-Class Insecurity: Tax and the Ideology of Unequal Economic Growth
Framing Middle-Class Insecurity: Tax and the Ideolog y of Unequal Economic Growth
Martha T. McCluskey
SUNY Buffalo Law School
Recommended Citation Martha T. McCluskey, Framing Middle-Class Insecurity: Tax and the Ideology of Unequal Economic Growth, 84 Fordham L. Rev. 2699 (2016). Available at: http://ir.lawnet.fordham.edu/flr/vol84/iss6/13
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Article 13
Tax law has helped make struggle, risk, and sacrifice the new normal for
the American middle class. This change in middle-class status results not
only from tax policies, but also from ideas about tax that cultivate
acquiescence in unequal austerity.1
As Lisa Philipps shows in the context of Canada, recent income tax
policies encourage middle-class citizens to rely more on their own private
family wealth and personal human capital—and less on collective public
protection—to secure middle-class expectations of access to health care,
education, income security, family, retirement, and economic opportunity.2
Yet, as Philipps explains, those tax policies of self-reliance clash with a
reality in which middle-class earnings and savings are increasingly
precarious, if not substantially out of reach. That reality of middle-class
vulnerability is even more pronounced in the United States, with more
limited public support for health care, retirement, and higher education.
This insecurity has grown even as middle-class American households
generally have taken greater responsibility for economic gain by increasing
work productivity, upgrading educational attainment, and working more
hours.3 From 197
1 to 2015
, U.S. household income overall has shifted
upward from middle-income to upper-tier households, leaving the middle
* Professor of Law and William J. Magavern Faculty Scholar, SUNY Buffalo Law School.
Thanks to Linda Sugin and Mary Louise Fellows for organizing the Fordham Law Review
symposium entitled We Are What We Tax and to Lisa Philipps and other participants at the
symposium for rich and inspiring discussion and comments guiding this Article. For an
overview of the symposium, see Mary Louise Fellows, Grace Heinecke & Linda Sugin,
Foreword: We Are What We Tax, 84 FORDHAM L. REV. 2413 (2016).
class both smaller in size and squeezed economically.4 In 2013,
upperincome families had seven times the wealth of middle-income families,
compared to three times the wealth of middle income families in 1983.5
The upper 10 percent have received an increasing share of gains from
business cycles since the 1980s compared to the bottom 90 percent of
households and all of the gains from growth during the 2000 to 2008
business cycle.6
How we think about tax shapes how we think about this new redivision
of the economic “pie.” Tax policies championing security through
individual savings do not simply promote the ideal of personal economic
responsibility for economic loss and insecurity. More insidiously, these
policies convey the message that good middle-class citizenship is about
accepting low expectations of personal economic success. The prevailing
scholarly and popular tax discourse helps rationalize increased middle-class
risk and sacrifice as an economic fact beyond politics.
This discourse largely presumes that middle-class economic power and
prosperity does not come from democratic solidarity and collective
protection. Instead, it echoes a neoliberal vision that embraces government
support as a foundation of economic success, but insists that success
depends on redirecting government support away from ordinary workers,
families, and consumers toward protecting concentrated private market
wealth as the primary engine of economic prosperity. That vision identifies
middle-class status with incapacity, insecurity, and dependency in a new
and naturally unequal economic order.
A more accurate understanding of the role of tax in the political economy
can help challenge this neoliberal reconstruction of the middle class.
Government taxing and spending is fundamental, not supplemental, to the
seemingly private market order. Tax policy inevitably operates to lead, not
just to follow or distort, the “normal” production and distribution of
economic power. Tax policy, in a democratic government, can and should
be a means for ordinary citizens to participate in constructive collective
control over economic production for their benefit.
This Article first explains how the prevailing discourse frames federal tax
support for the middle class as either consumption or redistribution, both of
which appear to be essentially unproductive and potentially destructive.
Second, this Article examines the expansion of state and local tax support
for elite private capital. In contrast to tax support favoring the middle class,
this upper-class support is accepted widely as necessary for productive
economic development. Operating below the radar of prominent tax
4. For instance, 49 percent of U.S. aggregate income went to upper-income households
in 2014, up from 29 percent in 1970. PEW RESEA (...truncated)