Class System
Here's one I don't know quite how to feel about: a report on how the gap is widening between the uber-Rich and the merely rich.
Before I start, you need to understand that I believe in rewards for hard work, and if I honestly thought that richer people had worked harder to deserve their wealth than others, I'd be a lot more staunchly conservative. That seems to be the core belief of most Republicans, that rich people got that way through the sweat of their labor and through the risks they took, and thus it is unfair to treat them any differently than you would anyone else.
I, on the other hand, think that there is sufficient benefit to being rich that in having money, it's far easier to make MORE riches. For example... I'm not rich, neither are my parents, but they're comfortable. Growing up we were definitely on the top end of the "upper middle class", so much so that I got to start out my professional career free from student loans. I was able to attend one of the best Universities in my field. I received a car as a graduation present, meaning I got to avoid having a car payment for the first 5 years of my post-collegiate life. And in a few cases in my early adult life I made mistakes (we all do), but I had parents and grandparents there to prop me up, help take some of the burden, so that instead of greivous harm, these mistakes merely stung enough so that I'd learn.
As a result, I can't honestly say I deserve my wealth more than one of my co-workers might, someone who pulled himself up by his bootstraps, scrimped and saved and now, with the same income as I have, has significantly less wealth due to the things he had to pay for, which I didn't.
And as I have more money, it becomes easier for me to make MORE money. For example, real estate. I have a number of investments in real estate which make me some good money. In order to get these investments, I had to have some assets with which to convince the bank to loan me money. Once I had that, and bought the first property, I then had MORE assets with which to convince the bank to loan me even MORE money, and the cycle continued. Because of the plenty I enjoyed from my parents, I have opportunities for MORE plenty than others might.
This personal experience is much of why I don't buy the "treat the rich the same as everyone else" argument.
And so, when the linked article comes out and says that in the 22 years betwee 1980 and 2002, the top 1/10 of 1% of Americans (wealth-wise) saw their percentage of the national incomes more than double, I have to pause and wonder if this is a good thing. When 0.1% of the population now makes 7.4% of the income (in 2002), I have to wonder why they really need fully 15% of the tax relief under the Bush tax plan.
Sure, I understand the argument, why should people who have made that much money have to pay a higher percentage of it in taxes. But again, I know some blue collar workers. I have some in my family. People who sweat and toil at construction jobs for less than half what I make. They definitely put in more physical labor than I do. I have a very hard time believing that the uber-Rich (that top .1%, who make an average of $3million/year) could honestly be working 80 to 100 times as hard for their money. Working that hard would kill them, the human body can only take so much.
Don't get me wrong, I don't pay any more taxes than I HAVE to, and I carp about the ones I have to pay, but I really don't have a huge problem with the fact that I pay a much higher percentage of my take home pay than does a minimum wage earner, who brings home under $20,000/year. I think progressive taxes are fair, because they give a certain relief to people who (on average) have not had the breaks the richer have (either in terms of wealthy families, or in terms of raw abilities in some field).
Once you reach a level of compensation at which you could pay most family's bills tens or hundreds of times over, in large measure your wealth is sustaining itself, you can afford to chip in a bit more towards the care and feeding of the government.
My two cents, and perhaps the most liberal thing I've said on this blog in a while. The libertarian side of myself would like to see income taxes go away entirely, in favor of a government which could live within much more modest means, but the realist in me doesn't see that happening any time soon, and as long as we're going to have record spending, we should at least have the income to cover it, and it's fair that that income come more from those who never have to worry about how to put food in little Timmy's mouth, clothes on little Sheila's back or a roof over the family's heads.
(Note: Please don't take the above to mean that I support the welfare state. I don't. I think the instances of people who are truly abusing the system are horrible. Having a wife who grew up in the south, I am more intimately aware than I used to be of the numbers of people living entirely on the public dime. I believe that it's very rare to find the person who absolutely CAN'T work. But on the other hand, these people have no legitimate income anyway, so they're not paying any taxes, so talking about what their tax RATE is doesn't make much sense. My argument is regarding compared tax rates among people who ARE working and DO support themselves and their families.)
Copyright (c) June 6, 2005 by Liam Johnson. http://www.liamjohnson.net
posted by Liam at 6/06/2005 05:01:00 AM
8 Comments:
Liam, according to your second paragraph you sound as though you believe people should be rewarded at how hard they work physically. That would difinetely limit the income of those of us who are not as fit as others or are handicapped in some way or another.
If you look at the history of the income tax, it was started as (I think I remember the numbers correctly) 1% of all monies earned after $100,000.00. This was just before WW1 so you could translate that to maybe $3,000,000.00 with inflation in todays income. If the tax were still that, no one would have a problem. In looking at the history books, there were editorials written then that we were letting the camel get his nose in the tent, and that the income tax would be the vehicle that would enable government to start a wealth re-distribution system.
Looking still at the history of the income tax, it has been so regressive in past years that rich people spent a lot of their productive time figuring out ways to avoid the tax instead of earning more money, creating more jobs, etc. Basically, I agree with a progressive tax if we have to have one. But to say that 38% of ones gross income is not enough to give the government (and that is what you said when you stated that the super-rich should not have gotten the Bush tax-reduction)and that they should give more, is to completely abandon liberty.
Personally, I think a consuption tax would be much better but it would be hard to protect the truly poor from paying.
Wednesday, June 08, 2005 9:31:00 AM
I didn't mean to imply that physical work was the only work. But there seems to be a belief by the white collar workers of the world (particularly those at the top of the food chain) that their work is somehow MORE taxing and MORE worthy of high pay than physical labor. Now, given that MOST people could labor physically, but there are less who are capable of performing white collar jobs, I can see a small disparity, and someone who starts a business and manages to parlay it into huge riches generally deserves what they get (I say "generally" because there are cases of people who lucked into being in the right place at the right time).
But most CEOs did not start the companies they run, do not own (much of) the companies they run, and often take home compensation far in excess of their value to the company. How often do we hear another story of some multi-million dollar per year CEO leaving a company amid poor performance, and cashing out stock options and "golden parachutes" worth obscenely large numbers of millions of dollars.
It's like paying bonuses to bus drivers who crash their busses. We seem to have developed an upper class in this country consisting largely of A-list actors, atheletes and CEOs, who all seem to believe that because they make more than others, they're somehow WORTH more than others.
I'd give you a personal tale of one of the executives in charge of my company, but as I work for them and depend on them for my livelihood, it wouldn't seem smart, even though it would be typical and in no way different from any other company the size of the one I work for. Physical labor isn't worth MORE than mental labor, but there's a limit to how much of either one human being can do.
So, back to taxes. I agree our taxes are too high. But they're too high because our government holding the purse strings is like a kid left watching the soda fountain. They can't resist spending and they don't care, because they can vote themselves the right to borrow more money. They can even vote themselves pay raises. They fill bills up with "pork" for their own states, and the people in their states love them for it, not recognizing that rather than being a boon, that pork actually ends up COSTING them money.
I'd love to have a world where the rich paid 10% in taxes, the middle class paid 5% and the working poor paid little or nothing, but we're not going to get that when even the self-proclaimed party of fiscal responsibility heaps us with record deficit upon record deficit. If we passed a law saying that the budget had to be balanced, and that taxes would rise each year to meet the spending of the government, you can bet pretty quickly people would start to reject the politics of spending and vote out these irresponsible clowns, but it feels like we're getting something for nothing. That's why we have such a bankrupcy problem in this country: most people don't think of buying something on credit as costing them anything.
I read a statistic somewhere that some obscene percentage of the money collected by the IRS (I seem to recall it was nearly half, but I could be off on that) goes to paying for... the IRS. So I agree, if we had a more flat tax structure, or a consumption tax, we could all pay a lot less, because the regulating agency could be a lot smaller.
But when it comes down to it, who has the power in the government? The poor? Yeah, right. Although they love to tout their humble beginnings, most of our upper level governmental employees are fairly wealthy people. They spend all of their time talking to OTHER wealthy people, so as to get large donations. The rich can buy access that gets their side of any argument heard, and even when there's nothing untoward going on this still gets them a disproportionate share of the legislation. If you're getting a disproportionate share of the benefits of government, you ought to be paying a larger share of running it.
Liam.
Thursday, June 09, 2005 11:07:00 AM
"If we passed a law saying that the budget had to be balanced, and that taxes would rise each year to meet the spending of the government, you can bet pretty quickly people would start to reject the politics of spending and vote out these irresponsible clowns, but it feels like we're getting something for nothing."
Liam, there is something we could agree on. You said it and I agree. So the next time anyone calls for more taxes on anything (to increase the amount of money the government at ANY level has to influence our lives) just vote NO and say it out loud so that all of your neighbors know.
Thursday, June 09, 2005 9:28:00 PM
Absolutely. But the way to do that right is not just to refuse new taxes. The way to do that right is to put the penalty FOR new taxes on the heads of the people in the Executive and Legislative branches of our government who don't know how to balance a checkbook.
Because what we need to do is be more responsible. I really have no problems paying reasonable fees for reasonable services. I think it's perfectly reasonable for us all to pay in some to make sure there are fire men to come put out our house if it catches fire, and police men to patrol and protect our neighborhoods.
And if you could convince me that we were getting reasonable service for the taxes we are paying, I might even change my tune. But as it stands, I think we spend WAY more money on things that either don't deserve to be spent on, or else deserve to be but at a far lower price point.
But what I DON'T want to do is advocate fiscal irresponsibility. Which is why instead of simply voting against any new taxes, I'd like to tie our taxes to our budget, which WOULD raise taxes in the short term, enough that the populace would start to recognize the true cost of bloated government and would very quickly voice their displeasure in the next election cycle.
(Yes, we pretty much agree, but for the first time in a couple of days, I feel clear headed enough to write, so I can't seem to stop myself from expounding. :-) )
Liam.
Thursday, June 09, 2005 10:39:00 PM
Transparency and accountability are wonderful goals which might help voters hold politicians accountable if:
1. Politicians wern't so good at obfuscation.
2. MSM were truthful.
3. Congressional Districts were competitive.
Monday, June 13, 2005 1:40:00 PM
Yeah, and you missed:
4) The electorate were (on average) forward thinking.
One of the biggest failures of my philosophy is that it relies on people doing what's RIGHT (or even what's better LONG TERM) over what's best immediately.
We have an extremely "immediate gratification"-centric society. Most people, if given the choice between long term security or tax cuts now would opt for the tax cuts now. Heck, most of us know the conditions under which the workers work to sew the clothing sold at Wal*Mart, and yet when virtually the same shirt can be had from another store for 3-4 times as much (or more) sewn by an American UGW member, most of us will opt for the sweat-shop-created cheaper shirt.
We can't be relied upon to do what's RIGHT, when what's CHEAP is available. And so I think most politicians would be voted out of office faster for not bringing home the pork to their home states than for being fiscally responsible, bringing home NO pork, but bringing the budget into balance.
Liam.
Tuesday, June 14, 2005 8:09:00 AM
Liam,
I've been observing longer than you and perhaps that mellows my perceptions but I am getting to the point where I think that everybody voting their self-interest works most of the time and is a good second best to what is right.
Thursday, June 16, 2005 10:27:00 AM
I think you're right, and I think that's part of why our system is set up the way it is, with our votes selecting those who will make decisions for us, rather than making the decisions directly.
Our system is set up to (hopefully) put more knowledgeable people into positions where they can make the right decision more of the time than we the electorate would make if asked to decide each issue individually.
But I still lament the fact that we so rarely do the RIGHT thing, even though there doesn't seem to be any way to MAKE it happen.
Liam.
Thursday, June 16, 2005 10:51:00 AM
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