A hard look at the data explains the polarization of American politics: state and local governments are increasingproperty taxes even while the housing market crashes, and this is killing the middle class. In many parts of the country prospective homebuyers will pay almost as much in property taxes as in mortgage interest! No wonder the residential real estate market can’t come up for air, and why the American middle class feels that it is fighting for its existence. The only solution will be the kind pioneered by Wisconsin Gov. Scott Walker, one of the real heroes of our time: renegotiate the whole relationship between the government and the government unions. But that would mean the end of the Democratic Party as we know it. That’s why the upcoming presidential election will be the nastiest in living memory.
Crunching the numbers, I was gobsmacked by the way in which the tax burden has trickled down to the state and local level and crushed the middle class. The charts and graphs are available in my “Spengler” essay at Asia Times Online this morning: