Uniparty Fiddles As America’s Middle Class Burns

There is no “official” definition of what constitutes the “middle class.” But a widely accepted view is roughly those households whose annual income is about two-thirds to double the national median income, adjusted for family size and local cost of living.

Fifty years ago, households like these totaled 62% of the nation’s income; half-century later it is 42%. Just as telling, the “middle class” head count has shrunk as well, constituting 61% of adults in 1971; today, it’s 51%.

What was once a clear majority will soon be, if not already, a shrinking minority. Indeed, income distribution in America used to be largest around the middle but now it’s growing fastest at the top and bottom, like an economic hour glass.

One example would be the CEO-to-worker pay ratio in major U.S. companies. In 1989 it stood at 60-1; by 2024 it was a staggering 281-1. Are we really to believe these folks are contributing that much more to our standard of living than they did 35 years ago?

Now far be it from me to blame capitalism when in fact crony capitalism is the root of the problem. Defenders of free enterprise better soon acknowledge that is what’s driving the widest income gap in a century before the Democratic Socialists of America (DSA) “storm the Bastille.”

Whether we’ve actually entered another Gilded Age is unclear; what is clear is that history tells us a hollowed out middle class is not politically sustainable. Despite how many insouciant buffoons like Ben Shapiro tell the jobless just “learn to code.”

Which, naturally, fails to address the real issue — a crippling devaluation of the dollar. From the Great Recession bailouts of 2007 to COVID inflationary ‘stimulus’ to a costly war in Iran that threatens the last thing propping up American profligacy — the petrodollar.

Despite Treasury Secretary Scott Bessent’s desperate attempt at suppressing long-term interest rates, the “vigilantes” are back. The so-called bond rout is sending an explicit warning about the risk of holding U.S. debt. In other words, trying to pay back creditors with devalued dollars can’t go on forever.

And as if a drastic decline in purchasing power wasn’t bad enough for American workers, the uniparty elites threw in an open border race-to-the-bottom on wages, outsourced everything from IT to beef processing and now looks to give Gen Z a jobless AI recovery.

Meanwhile, those who already own the assets (the wealthiest 10% of households hold almost 90% of all stocks) are doing great; those who are trying to accumulate them are not. To wit, the market’s hitting highs as median wealth declines.

To average Americans, especially the young, it feels like the oligarchs are on top of the world while the rest of us are “falling down.”

Owning your own home, a piece of property that represented a stake in the system, used to be the American Dream. And if you worked hard and saved your money, the cabin up north wasn’t out of the question. No longer. Young people can barely afford rent let alone the cost of home ownership which has surged to five times the median household income.

Oh, and forget about that cabin anytime soon. An upscale piece of property on a pristine lake or anywhere near the ocean isn’t out of reach for just the middle class, it’s out of reach for the run-of-the-mill wealthy when “valued” in the tens of millions.

First-time buyers have been priced out of the market and the affordability crisis overall is even worse considering you’re getting less for more — less service, less car, less home. The kids are moving back in the basement.

So what does the uniparty call for? More Countrywide-style mandates for subprime mortgages underwritten by taxpayer-backed Government Sponsored Enterprises (GSE) designed to prime the pump. That will do the same thing it did before — further increase asset values for those who already own them.

Reflating a bubble with artificially low interest rates in a nation awash in a $40 trillion debt merely puts off a much more severe correction (depression?) after today’s “career politicians” are gone. And “kicking the can” is what a uniparty does best.

Inscrutably, the White House continues to call for lower rates engineered by a central bank that got us to this mess to begin with. But making the Fed the lender of first resort at artificially low interest rates is precisely what flooded the economy with trillions that bid up the cost of everything.

This isn’t just “misguided” policy — it is a massive tax because the politicians know wages never keep up with rising prices.

As a couple of Washington insiders recently noted, “From January 2021 to June 2022, workers experienced a 5% decline in purchasing power as nominal wages rose only 7.3% while inflation jumped 12.3%…more than five years after inflation accelerated, workers remain down approximately 2.5% from January 2021 levels.”

At some point, real leaders recognize that only sound fiscal policy can tame consumer prices and the national debt, end $1.8 trillion budget deficits and grow the middle class. Spending restraint for a skyrocketing federal budget of $7 trillion dollars that consumes 24% of national income must come first.

But a tax code that hands out costly carveouts to those who don’t need them is a close second. From subsidized flood and crop insurance to immediate expensing (sorry, I’m not a fan of two sets of books — tax depreciation should reflect the life of an asset), the list is endless.

Here are a few of the most egregious if Republicans, other than J.D. Vance, are serious about getting back blue collar voters. For sure, the country-clubbers at the Wall Street Journal will complain about not punishing the successful, but the tax code shouldn’t favor them either.

First, end the subsidy for “carried interest” on Wall Street. Private equity firms benefit from a lower capital gains tax rate of 15% on profits (essentially commissions) from a “stake” in firms where their own capital is not at risk. Since ordinary income tax rates can go up to 35%, suffice it to say lobbyists for these outfits, such as BlackRock, are, uh … equal-opportunity donors.

Second, social welfare spending has soared to well over a $1 trillion dollars annually, but why should it subsidize big corporations? A liberal group (even a blind squirrel finds an acorn once in a while) found that some of America’s richest companies reported 2024 median pay that would make a family of three eligible for food stamps and Medicaid health insurance in most states.

Notwithstanding a reasonable training period, any corporation with its labor force on public assistance (think Amazon, Walmart, et al) should pay a hefty profit surcharge to reimburse the taxpayer until the numbers fall below the average population rate.

As for the commercial trucking firms delivering all those online orders with undocumented drivers who can’t speak or read English and “squeeze American truckers out of the marketplace with low wages…often hauling guns and drugs on behalf of crime syndicates“?

Prosecutors should throw the frick’in book at ‘em!

Not surprisingly, many of the worst of these offenders are found in “sanctuary states.” So, once again, why are we subsidizing high-tax Blue states to flaunt the law, especially when it comes to illegal immigration?

Well, because a few “bipartisan” Republicans from California to New York insist on a perversion in the tax code called the SALT (state and local taxes) deduction for their constituents. It was expanded in the One Big Beautiful Bill even though eliminating it would make Democrat governors pay for their own socialism.

Oh, and giving it the kibosh would also raise about $2 trillion over a decade to close those deficits. For heaven sakes, the federal taxpayer is already on the hook for Minnesota’s $9 billion fraud scandal, why reward Tim Walz for it?

But apparently, that’s a hill too steep for establishment Republicans to die on — along with $1.5 trillion Pentagon budgets, Voter ID or, for that matter, any bill that doesn’t poll well with special interests on Capitol Hill.

Finally, and perhaps my populist favorite, remove all tax-exempt status for those massive enterprises called “non-profits” who lavish their executives with million dollar salaries and perks. From big hospitals to credit unions to utilities to insurance companies to left-wing 501(c)(3) “educational” organizations —these “tax-exempts” compete with taxpaying for-profit businesses while they amass over $3 trillion in gross income every year.

Well, there you have it. A few tax policy changes that might actually shore up the federal fiscal crisis (without raising personal income taxes) while leveling the playing field for America’s “forgotten man.”

Something President Trump promised to do. I’m afraid it’s a sign of the times that he now has to pin his hopes on behemoth AI data centers to do it.

Jason Lewis is a former Minnesota Congressman and broadcast veteran. Prior to serving in the 115th Congress, Lewis hosted a talk radio program for over 25 years and has authored two books, Power Divided is Power Checked (2010) and Party Animal (2022). This article has been republished from the author’s Substack, which can be viewed here.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.