The Revolt of Mr. Middle

...Proposals for black capitalism, financed by tax incentives to investors or by reinsurance schemes or by direct public grants, again call upon the overburdened majority to foot the bill...

...It is paid by wage and salaried people, with the exception of those self-employed who feel the need for the security...

...In rented buildings, the tax is allowed as a proper cost to be included in the rent...

...The median family refuses to be taxed for policies that it believes—justifiably or not—are being used to endanger two pillars of its existence: the neighborhood and the school...

...So, too, welfare funding: The Federal money comes out of revenues raised from middle America...

...Profits are already well on their way up before prices begin to rise...

...The habit in the past has been to let the middle carry the burden of progress, unaided by the top, with some of the following results: The middle funds Social Security, especially the lower middle, since the tax is flat rather than graduated by income...

...the take-home pay of the typical worker increased only 31 per cent and, discounted for prices, came to merely 11 per cent...

...The growing frustration cannot be pooh-poohed as transient, or diagnosed as the product of sick minds, or denounced as the affluent looking down their blue-blooded noses at the poor...

...The typical American family is mortgaged to a tomorrow that, if shaken, would bankrupt the nation's "middle" both financially and spiritually...

...And this family now feels that the reasonably predictable verities on which it planned its future —the schools, the neighborhood and "disposable income"—are in danger...

...the frustration in the tax revolt...

...For the drive to slave and save has not been tied to another ancient dictum, "Neither a lender nor a borrower be...

...The dosages threaten his economic well-being...

...But, since it is common for states to base the tax on a merit rating system (the higher the unemployment in a firm the higher the tax rate), the big, stable companies, like banks and insurance companies, pay virtually nothing into the fund while the unstable companies, like small manufacturers and contractors, pay the highest rates...

...Out of similar conflicts arose Bacon's Rebellion, the Whisky Rebellion, the Know-Nothing Riots, and the Great Draft Riot of 1863...

...Department of Labor, calls for something around $9,000 a year...

...The payer is Mr...

...Renewed appeals to continue the old habit are presently grating on the ears of the nonaffru-ent American...

...The summer soldiers of liberalism, who joined the ranks when the warring was easy, are opting out of combat: a genteel betrayal...

...Members of the rising middle have learned to borrow, to take out mortgages on homes, advances on cars, installment systems on everything from pots to pianos...

...Hence, their style exceeds their stipend—a precarious circumstance for these millions of Americans who have come to live in terms of a fancied future when there will be enough to educate the kids, pay the doctor bills, meet the bank loan...

...They are not buying what they can afford, but what they expect to be able to afford as the dynamic drives them upward...

...Middle must pay a little bit more in taxes...

...But the ultimate cost—unless funds are made available through basic redistribution—must be carried by the same people who are groaning under the current load...

...Wage and salary gains are being whittled away by taxes and consumer prices...

...The dynamic within this vast citizenry is sufficiently complex to carry it to the Right or Left, depending largely, in this volatile moment, on the kind of leadership it gets...

...If you are one of those 21 millionaires who paid no income tax last year, you also did not pay into the Social Security fund...

...To fill the vacuum caused by the abatement, Mr...

...Perhaps a negative income tax is a more dignified and socially constructive way to help the poor than the present welfare system...

...To spur private initiative in the area of social action, governments at all levels have offered tax abatement plans to ease taxes on the investors and developers...

...The median family income (in real dollars, but without allowing for taxes) has risen by about 3-4 per cent a year in the last four years, yet as is evident from the above, this is not "adequate...

...That same family has been trying to make it over the last few decades, with only a modest measure of success...

...The unhap-piness of this wage earner is multiplied when he is told that he is to blame, because his high wages push costs up, his desire for security in old age forces deductions up, his demand for better education and wider highways and modern hospitals compels higher taxes...

...There are, of course, the usual This is the fifth in a series of articles by Gus Tyler, Assistant President of the ilgwu, on the problems and prospects facing the Democratic party in the wake of last fall's Nixon victory...

...The personal effort has been based on the traditional virtues of work and thrift...

...While the funding of unemployment insurance is different, because there is no direct worker contribution, the net effect is the same and worse...

...Each of these ready responses contains a grain of truth...

...The Right sees the conversion to conservatism as the liberal comeuppance...

...The "median income of families in the United States reached $8,000 for the first time" in 1967 (before taxes), according to a U.S...

...Unless the trend is checked, the end result could be a turn to racist politics and primitive economics—a policy of governmental reaction urged on by that vast majority of "middle-income" Americans who for more than a full generation made up the heavy voting legions of liberalism (and radicalism) in the United States...

...A "modest but adequate" family income, according to the U.S...

...These are the kindlings for a revolt of the middle—an unhappy and perilous situation with a sad and bloody past in American history...

...Many of those who were economic liberals were never racial integrationists: the rebirth of bigotry...

...Consider the economic condition of the great American middle...

...But if you run a monopoly industry you price-fix to transfer the cost to the consumer who, of course, is middle America...

...The simple fact is that this majority is not affluent...

...A few facts demonstrate why: Between 1960-68, after-tax profits went up 91 per cent...

...The fact that neither of these medicines is a cure for the ailment should not blind policy-makers to the depth of mounting feeling behind these nostrums...

...To the extent that the middle has risen, it has done so through a dynamic of personal effort and social struggle...

...It is not my present objective to evaluate each of these proposals in and of themselves, except to point out that the burden of funding— and, in some cases, of conflict— falls once more on the middle...

...Here's the way the Wall Street Journal analyzed the inflation of the last three decades: "In the past 20 years, there have been three distinct periods in which factory prices climbed substantially over a prolonged interval...

...The fear is expressed in the backlash...

...if you make $15,600, you pay on only half of what you earn...

...Middle carries the burden...

...dividend payments were up 84 per cent...

...Other markers are: the sizable Wallace vote, the largest for a third party since La Fol-lette in 1924...

...If you are an employer, you do pay into the Social Security fund— but...

...It sees itself caught in a squeeze: from on top by the rich with their mounting charges for living, and from the bottom by the poor with their disorders (crime or riot) and welfare costs...

...A somewhat more sophisticated explanation sees the new conservatism as the natural state of the once poor, who have now arrived at affluence and consequently are changing from anti- to pro-Establishment...

...And who funds public education...

...The New Left sees it as the long-awaited liberal betrayal...

...Ergo, the typical family sitting at the midpoint of the American economy just doesn't make it...

...Start with the last—income...

...Similarly, the half million families that moved above the poverty line in 1967 are hardly affluent...

...If anything, they multiply problems...

...The liberal boast that the present state of affairs is its handiwork must be turning many away from liberalism: the comeuppance for hyperbole...

...Faced with this threat, the average worker reacts instinctively: Strike for wages, vote against taxes...

...Blindly, it strikes out at both by refusing to pay new taxes and refusing to admit newcomers...

...Local money comes out of property and, even worse, sales taxes...

...The emotion is a fact, one that in political life is as real as a final election count...

...If union rank and filers have been voting down their leadership on contract renewals, it is due in no small part to the realization by members that a 10 per cent money raise is not 10 per cent at all after income tax, sales tax, property tax, Social Security tax, and a higher cost of living...

...The trend is patent...

...The composite picture is that of an American majority, living in affluence, infected with bigotry, turning upon its once liberal pretensions to join the ranks of reaction...

...If you are a small entrepreneur in a competitive enterprise, unable to pass on the cost to the consumer, you count it as part of your wage bill and must limit wages accordingly, again at the expense of Mr...

...Despite this evidence, labor is charged with the crime of inflation and is threatened with condemnation in a "cooler" where planned unemployment will freeze the wage...

...Many liberals—especially the rich and removed—stigmatize it as "bigotry" and denounce it as the moral depravity indigenous to unwashed whites...

...Matters have not been helped by a number of proposals that suggest there is a way to solve our problems without any basic redistribution of wealth and income...

...Finally, it is true that millions of people who once had nothing to lose, now have something: jobs, savings, homes, and a future for their kids...

...These are planks that call for a negative income tax, school decentralization and black capitalism...

...If you earn up to $7,800, you pay on everything you earn...

...And attempts to boost taxes are likely to be totally vetoed by parents who have already pulled their kids out of public school for private education and feel they are financing systems over which they have no control...

...The employer passes on the cost to the consumer in monopolies, and to the wage earner in competitive industries...

...Department of Commerce report...

...The third article, "Uncovering the Riches" (NL, March 17), concerned the need for income redistribution...

...What is worse, the prescription appears to be counterproductive—if disorder is a symptom of social illness...

...In tandem, the two have increased incomes and securities while raising expectations and new insecurities...

...In each instance, labor costs per unit of factory output were declining when the price climb began—and these costs continued to decline for a considerable period after the price rise was under way...

...Poor...

...In communities of small homeowners the money comes almost exclusively from an ad valorem tax on properties that are mortgaged to the chimney top...

...The natural bent of political leadership—including liberal leadership—is to fall back on past habit to solve present and future maladies...

...Tyler's first article, "1970: Year of Decision" (NL, February 17), focused on the next crucial national election...

...If applied all over the country as a substitute for the many relief systems in different localities, the negative income tax might take some of the pressure off a place like New York, where the relief recipients now number 1.2 million at an annual cost of $1.9 billion, with 20,000 being added to the rolls every month...

...In each case, corporate profits began to increase sharply well before the price climb started...

...Again Mr...

...The true picture, however, is far different from a collage of these partisan parts...

...simplistic explanations for this shift...

...the million-plus vote in New York for the virtually unknown Conservative candidate for U. S. senator, the biggest ever cast for a minor party in the Empire State...

...Middle and, often, Mr...

...The most obvious marker was the election of Richard Nixon...

...His second piece, "Puncturing the Liberal Illusion" (NL, March 3), dealt with the failure of liberals to take control in Washington...

...the social struggle has centered around trade union and political action...

...In short, the American worker— blue or white collar, salesman or technician, laborer or civil servant —feels he is being called upon to underwrite highly dubious plans, while the truly rich multiply their riches through "poverty programs" involving training, housing and petty capitalism, also underwritten by the worker...

...In short, most Americans are still trying to climb out of economic insecurity and continue to view the world around them in terms of the threats to their frustrated hopes...

...Whatever the merits or demerits of school decentralization, the quality of education is not likely to change with the existing limited funds...

...Peter Bernstein, an investment counselor, put it a bit more succinctly: "Instead of labor costs pushing prices up, what we see is a profit-push...

...The most irritating of these charges is the one that puts the blame for inflation on high wages— that is, on unions...

...Missiles and Money" (NL, March 31), the most recent piece in this series, examined the relationship between arms control and domestic reform...

...a Harris poll in December 1968 showing 38 per cent of those questioned labeling themselves "conservative" and only 17 per cent "liberal," in contrast to a similar poll in 1964 that showed fewer conservatives and more liberals...

...The tax revolt is an economic uprising that, in many urban areas, smacks of an ethnic riot...

...The agony and anger of those workers, black as well as white, are heightened by the fact that where there is friction, frequently ethnic, over the job, the neighborhood, the school, it is the worker of "median" means—not the truly affluent—who must literally live or die in the troubled terrain...

...The state of "middle America" is more simple and its dynamic more complex than the caricature of current cliches reveals...

...It is the reaction of the American yeomanry—an alienated majority—to a circumstance it does not understand at a time when political leadership offers neither understanding nor solutions...