An unfair transfer of wealth; that’s what the Republicans call it when you suggest a progressive tax on the wealthy. The truth is that transfer of wealth is exactly what has been happening to the middle class for over 30 years.
The middle class has been sucked dry in a variety of ways. One of the most effective ways to transfer wealth to the rich is through the US health care and health insurance industries. Health insurance companies conspire with medical professional organizations to set the fee for every conceivable medical procedure. Price fixing is illegal in some industries, but health insurance companies set these prices higher and higher based on the idea that health insurance would cover the exorbitant medical fees. Pre-Obamacare, the insurance companies charged ever increasing premiums with out of sight deductibles and exclusions for pre-existing conditions. The truth is that if your job did not offer health insurance you probably could not afford it or could not qualify to get it on your own. Even with the ACA, more people have insurance but the costs are still out of sight.
Medical debt is the number one cause of individual bankruptcy. This has been true for many years. Medical bankruptcies contributed to the 2008 mortgage and banking crisis along with other underhanded bank and wall street practices related to the mortgage industry. Banks were very happy to make bad loans and just as happy to foreclose on those loan. Then the rich devised new ways to create profit out of thin air by manipulating the mortgage and banking industry regulations.
The health care industry not only drains Americans’ savings it also helped to transformed banking and real estate. Yes, it is true. As medical debt and the foreclosures rates rose the banking industry collapsed because of the extensive manipulations. The market was flooded with foreclosures driving down the highly inflated real estate market. The bottom fell out and prices dropped way below what would have been considered reasonable. Anyone with money could buy properties in large lots at huge discounts from the failing banks. Even people who were not in foreclosure found themselves upside down in their mortgage with a loan they could barely afford.
As the real estate bubble burst and prices rapidly dropped, the banking industry was being scrutinized and lending became very tight. It was very difficult to get a loan. And so it was the wealthy who stepped in and scooped up properties at an enormous discount. Of course middle class families could not participate in finding a home at a good price because now they could not qualify under the new stricter lending practices. Any time the wealthy mess things up, it is the average person who pays the bigger price.
Health care is just one of the ways that wealth flows from the middle class to the rich.
So, the next time you hear a Republican tell you that a high tax on the wealthy is an unfair transfer of wealth, remember how they got wealthy in the first place.