Why should we tax the rich? Its a question that reminds me of a childhood argument I had with my parents every time they bought me a new pair of shoes. I wanted the latest (and most expensive) Nike tennis so they would always remind me of how much it cost to make them, how much some poor kid got paid and how much us suckers were willing to pay. My elementary response was, “would those kids even have a job if it weren’t for Nike?” Unfortunately at this point I can see any of the GOP candidates (with minor exception) respond the same way. Even as a child I could see the Conservative and Republican ideological brands were shinier but it was years before I considered the substance inside the slick packaging. Where did all that money go, were these kids really being treated fairly, did my purchase really affect the price and does it all really even matter anyway? The answer is yes it does matter, because we have entered a world where regardless of your ideology or the corporate tax rate the American standard of living can not be realized for the same wages companies can pay workers overseas. This is my anecdote for the situation that has led to shrieks of ‘class warfare’ on all sides and the latest brewing economic movement to “#OccupyWallStreet“. It comes down to the simple fact that if folks can’t feed there families and afford basics like transportation, education and insurance after working 40hrs a week there will be more working class uprisings. When working and middle-class people have jobs they don’t have time to riot, but give them 6 months of watching their family suffer and you bet they will take to the streets.
Here is the simple concept:
Yes, America is business friendly, which is why we have the world’s largest economy. So what in practical terms does it mean to be business friendly? Most times the talking heads will say “lower taxes” but clearly its not the only criteria because without tax revenue you could not have the others like: tap water, sewer lines, roads for customers and product shipments, local law enforcement, fire protection, an educated workforce, and so on. Somehow people seem to forget the enormous investments that were made during the Great Depression. Yes some of those projects were making weapons for WWII but make no mistake that was still government spending that put millions to work. There was also domestic spending on large infrastructure projects for transportation and energy that created a foundation that private sector interests could take competitive advantage of and become successful. Now that many of these larger corporations have grown internationally they only see the US as a market and not a neighbor whose success is seen as mutually beneficial. The folks who blame the government for all their problems should remember that they are in fact part of the government. That’s the catch in a democracy. If our government is out of control or ineffective it is up to us to fix and put it back on track.
I’ve noticed a lot of double speak emerge in the “get the govt. off my back” class. On one hand I hear the FED must stop printing money, on the other I hear its ok for the 1% to continue to collect a larger portion of the wealth. The issue is not that the rich are getting richer but that relatively the poor and middle-class are getting poorer in comparison. Yes the wealthy pay almost 50% of income tax in the U.S. but I’m sure Congress would lower the threshold if thats what people really wanted. Another more practical way is for wages to go up, but when corporations raise cain over a 4% increase in the marginal tax rate somehow I don’t see it in the cards.
When I hear rhetoric like “Americans work hard and should keep their money” I have to agree. The comment however seems to suppose that there is some positive correlation between how hard one works and their income level. There is no such correlation, if there were construction workers and middle school teachers would be the highest income earners. The latest line to enter the class warfare lexicon is ‘job creators’ so let me introduce another, ‘wealth creators‘. The workers who push the paper, turn the cranks and otherwise redistribute company revenue are the only reason these companies are profitable. A person who works full-time but can’t afford basic living expenses is not an employee but an indentured servant at best and a slave at worst. So when Bank of America lays of 40,000 workers as they plan, a good question is, “who picks up the tab for unemployment?” Of course its the tax payers, the same people who funded the financial bailout while job creators squandered the country’s investments and retirement. Sure, the company does pay a portion in unemployment insurance but it will never cover the true cost of unemployment that includes deep social, economic and psychological problems like alcohol and physical abuse.