These states have already used up their financial reserves. The ongoing real estate crisis, along with falling employment, means that these reserves cannot be replenished. To make bad matters worse, the rising unemployment pushes more people are into poverty. Official unemployment now stands at 9.5%. The actual figure is much higher since they do not count the “discouraged workers” who are no longer registered for work. Neither do they count the growing number of workers who are forced to work part-time. This puts tremendous pressure on Medicaid and other Federal agencies that deal with poverty. The Government’s answer is to push this burden onto the already overburdened states, further intensifying the problem.
The result is that 21 states have now restricted access to health care for the most vulnerable section of society. It raises the question of how serious is a government that talks about universal health care while the states take it away from those who need it most.
Along with the cuts in healthcare, 24 states have cut funds to early education and community colleges. Forty-one states have cut back on state employment. These cuts take more money out of circulation, further restricting the tax base and thereby intensifying the crisis.
The states are approaching a fork in the road. At press time there was a 58% gap in California’s proposed budget. Arizona has a short fall of 41%; Illinois and New York have a gap of 33%. These states cannot function without funds to care for the basic needs of its people, maintain its infrastructure and provide elementary police, fire and education functions. Where is this money to come from? There is no way to turn without raising taxes.
The rich in this country have accumulated huge fortunes. In 2004, the richest 1% of the population owned 42.2% of the wealth. The bottom 80% owned just 7.5%. Part of this accumulation was because they don’t pay their fair share of taxes. In 2003 middle-income families paid 10% of their income to taxes. The poor families paid 11% while the rich paid only 5%.
This situation cannot continue. The wealthy understand that something has to change and they are already moving through their agents in the mass organizations and the unions to see to it that “only poor people and fools pay taxes.”
It is hard to believe that unions dependent on the Illinois state budget have organized demonstrations in Springfield carrying slogans “Raise our Taxes.”
The corporations are again putting out the threat that if they are taxed they will shut down or leave the country. This threat is a hangover from the period of globalization when the runaway shop was real. The government, the corporations and the ruling class understand that their real base is the home market – something they can defend and rely on. They know that any further outsourcing of work will so impoverish their home market that they will not have the foundation from which to compete internationally. It is time to call their bluff.
There is no way forward but to again raise the battle cry of the people: TAX THE RICH!
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