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Gen-X Taxpayers, Forced to Sit at the Kids' Table

Gen-X Taxpayers, Forced to Sit at the Kids' Table

By Reed Galen - November 28, 2012

We’ve now entered the holiday season and as family and friends gather together, we all get to watch Washington’s latest self-made disaster play out. For Americans under age 45, witnessing the decisions being formulated in D.C. is akin to hosting Thanksgiving dinner for the rest of the country at your own house, buying and cooking the turkey and all the trimmings -- then being made to sit at the kids’ table.

It’s always easy to spot someone in Congress or the White House taking something seriously. First, they say, “I’m taking this very seriously." They outline the grave consequences of inaction, the requirement for shared responsibility, the need for bipartisan cooperation -- and the irresponsible nature of their opponents’ political games. Most of these politicians could compete on “Dancing With the Stars.”

Next come the ominous television ads by various special interests telling us how much they care about getting a deal done to avert -- in this case -- the impending fiscal cliff. Any agreement is a good one for the politicians and lobbyists, insofar as it leaves their particular sacred cows untouched.

But Gen Xers who own small businesses will, for starters, greet the new year with the payroll tax reverting to its 1990s levels. This is especially pernicious for the self-employed, who must pay both the employer and employee side of the tax.

Our cohort was hit harder than any other during the Great Recession, and the middle class under age 45 is likely to get battered again even if Congress and the White House come to the kind of solution that Washington pundits deem responsible. If Congress doesn’t fix the Alternative Minimum Tax (which it typically does yearly -- but never indexes for inflation), it will smack folks in the $75,000 a year range, which is above the average American salary but hardly represents the “millionaires and billionaires” President Obama is so fond of excoriating.

In the same way that we at the kids’ table crane our necks to hear what the grownups are talking about, we watch as the president invites the bosses of big labor unions to the White House one day and the CEOs of major corporations the next.

“We’re all in this together” is a great talking point -- unless your generation is among the groups hit hardest by tax increases, yet also with the smallest voice to do anything about it. Few Democrats even bother to assert that the thousands of additional dollars we’re going to pay in taxes next year is better sent into the yawning maw of the federal checkbook than into our own.

We haven’t heard any serious talk of entitlement reform, which those in our demographic really see as necessary to ensure the long-term stability of these programs intended for our benefit. For a start, the retirement age on Generation X and those that follow should be raised -- and not by a few months or a couple of years. We’re all likely to live into our 80s, our kids will live past 100 and in a New Economy with more college-educated workers and fewer manufacturing jobs, not as many of us are likely to retire in the classical sense anyway.

Generation X should keep track of how congressional members vote on various fiscal cliff components. In 2014 we should, like so many other interest groups in the U.S., hold those who vote for others’ benefits at our expense accountable for their decisions. We cannot and should not continue to vote in dismal numbers as the “grownups” make decisions that directly affect us and our families.

If, and most likely when, our taxes go up, Washington shouldn’t be surprised by the corresponding decline in spending. We simply won’t have as much disposable income with which to buy new products or start or grow a business.

Or perhaps we’ll stage our own generational capital strike. Forgoing Black Friday and Cyber Monday may be a short-term disappointment, but in the end, how many more flat-screen televisions or Apple devices do we need? Instead, maybe we’ll pay down our debt and save for important things like our kids’ education.

For now we seem destined to sit quietly drinking our chocolate milk and hoping for dessert and a later bedtime while the adults make decisions on our behalf -- using our own piggy banks. Just don’t expect us to be happy about it, or to make it a habit, because when it’s finally our turn to take our seats with the grownups, we might just turn the old table over, turkey and all. 

Reed Galen is a political strategist in California. He was John McCain's deputy campaign manager until July 2007.

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