The issue the Democrats intend to push forward as we approach the 2014 elections in
November is “Income Inequality”. It is
the old theme of their party – class warfare – rich vs poor, meant to appeal to
their base. Obama in his State of the Union speech echoed this theme time and
again – raise the minimum wage, extend unemployment benefits, make the rich pay
their fair share etc., etc. Much of this rhetoric is also designed to take
attention away from Obamacare which so far has been an unmitigated disaster
that some predict will have a significant negative impact on the economy.
We believe this
“class warfare” theme is getting old after five years of passing blame and I think the public is realizing it is getting old. There will always be income inequality – some people making low wages are just
starting their careers, some lack education, some lack skills, some are just not as smart as others, and some just
lack the ambition to work hard and try to “climb the ladder”. The Republican Party has always had a
different view of the reasons for income inequality; people need an economy that creates JOBS. The real income inequality are the long term unemployed Americans who now have no income whatsoever. The policies under the
Obama administration have created an entitlement society that will be difficult
to change; almost 50 million people on food stamps and almost half of Americans
receiving some type of assistance from the government. These policies are also resulting in a
national debt that may be difficult to recover from.
Our welfare system in many cases makes it more profitable to not work. I listened to a radio interview recently with an anonymous person whose was on welfare (she was white by the way). Her attitude was; "If you were me, would you work?" She lived with her husband in a $600/month apartment, they paid $50 of their rent, and the government subsidized the remaining $550. They received $497/ month in food stamps. They received a $100 credit on their utility bill. They received $800 a month in welfare. And they had a cell phone program worth $100 month provided by the government. With the rent subsidy this amounted to an income of $2047 month or $24,564/year. She was honest during the interview and also admitted her husband did odd jobs for cash. At the end of the interview she was asked if she would work if she had to; her answer: "Yes if I had to, but would you work if you had this income for free? I get to sleep late, visit with my friends, and do whatever I want each day"
These
Democratic "inequality arguments" are difficult to deal with, because they always include an anecdote about "Little Billy whose parents can't find work and they are starving". And this argument works, and secures a large segment of the vote each election; after all, why not vote
for the party that gives you “free stuff”. But the country needs to get back to
the basic philosophy of our founding fathers: equal
opportunity for everyone, not equal outcomes for everyone. Most people want to
work, it's in our DNA, and a thriving economy that
creates jobs will do more toward solving “income inequality” than anything else.
10 comments:
Great article, Dad. I like what you said about getting back to the basics of our founding fathers. I completely agree.
Thanks Trace, 'equal opportunity' is ALL you can offer people, and it is up to each of us as individuals to do what we want to do with our careers. If I were paid for all the hours in my life that I never got paid for, I would be Bill Gates (joke). But I have many friends who have no more education than high school who were smart, worked "day-and-night" during their careers and are now in that famous "1%" that Obama demonizes.
You're well aware of my libertarian leanings, and consequent abhorrence of taxes and government intervention. But there is something about the immense wealth concentrated in a few individuals that smacks of the robber barons of the late 1800s.
I don't buy the tired cliché overused by Democrats that suggests anyone making $250K or more is "rich." I understand and agree that many of those folks are small business owners who are creating jobs.
However, there is something almost profane about someone pocketing tens of millions of dollars a year and amassing tremendous wealth when so many people (hardworking people, not those on welfare like your example) barely make ends meet. There are many who work just as hard, if not harder, than your "day-and-night" working friends, but still just scrape by because they lacked the opportunities—or, simply, the luck—that your wealthy friends had. The formula is not as simple as "hard work + opportunity = success." If it were, then the 1% would be more like 10%.
I don't favor taxing the "rich" when the bracket is defined as someone making $250K/year. But I am open to experimenting with a new tax bracket of something like 80% for income over, say, $2 million. Try it for a few years and study the effects. Combine it with entitlement reform to try to reduce the loopholes that allow individuals like the one you describe. And use the revenue to help pay for those entitlements.
Well stated Mike. There is a point where excessive sequested wealth becomes obscene. The ultimate result becomes either an economic or a social revolution. Ask the Tzar or Marie Antoinette how they feel about the subject. Oops,sorry you can't do that, can you?
That should have been sequestered wealth. I should learn to proof read better.
Can't disagree with you more Mike and John. Hard to believe you have "libertarian" leanings Mike with wanting to tax earnings over $2 million @ 80%. That has been tried in socialist cultures, the result, no one makes over $2 million and the capital goes elsewhere. And hard work + opportunity almost ALWAYS leads to success. Maybe those that work harder than my "day-and-night" friends simply were not as smart, or ambitious; part of what I call the "hooray it's Friday" crowd. Myself, I was never jealous of people that made a lot of money as long as they did it honestly, so why should they give 80% of it to an incompetent government.
And your attitude about taxing the very rich @80% is just the first step. After society accepts that, then it just starts working down. Next people making $500K, then $250K, and finally why not redistribute income so everyone is equal. Seems like Carl Marx and Lenin tried that.
Chuck,
Well said. I heard the same radio interview and it simply reinforced my intuitive conclusion that people can easily be taught to be lazy but it's quite difficult to teach them to be industrious......especially after they have had a taste of the free stuff. Keep up the good work.
Mike Leach
I don't believe that 80% taxes are appropriate, 50% is closer to the mark. Capital gains should also be dealt with to stop speculation. If stocks are sold within a year then 80% is appropriate. Speculators do nothing to drive the economy, they just transfer wealth from one person to another. If all of them were out of the system it wouldn't hurt it at all. Splitting investment banks from deposit banks again, and eliminating all of the exotic products for investment would also be a good step. Those instruments are solely to increase wealth for those that can afford to use them. They do not add jobs, improve productivity, or create real national prosperity. They are a manipulation of the system solely for the advantage of a single class. Making banks service the loans they originate is also a great step "back" but in the right direction.
The economy stepped off the cliff when the Government started tinkering with what was conservative banking. The "gap" between the wealthy and the poor was greatly increased with the new banking and investment rules.
However, the fundamental issue is that people see accumulation of wealth as the "goal". It isn't. It is the by-product of good honest work and proper risk management in life and in investment. The shift in values is what has created a society that is focused on accumulation, rather than experiencing the moment and things around them.
Further,
that 50% taking some form of Government payment includes Social Security, Medicare, Disability including Veterans Disability; and in fact it is the greater portion of Government assistance. I think both parties make the mistake of singling out an individual instance as an "example" of the systemic flaws but they are not. This is a massive economy, with massive benefits and some fraud. Instead of focusing on the few "little people" that are getting away with a free phone, or an undeserved allotment of food stamps why are we not looking at Doctors that set up companies specifically to defraud Medicare out of millions of dollars. There are literally hundreds and hundreds of these professional corporations. I suspect they are quite wealthy individuals....and those cases I have heard of are ridiculously wealthy from what they have looted from the public coffers.....much of which goes up their nose as white powder.
Why are funds for enforcement not there, why is the IRS enforcement and collection division seeing budget cuts to levels that stop them from chasing some really heavy hitters. The answer is that the big gains will come from wealthy people illegally sheltering income and those same people have the influence to stop enforcement. Those are the questions I would like to see answered, not why "Thelma in Harlem" got an extra allocation of food stamps.
If Republicans are so fed up with entitlements, then why are they not proposing that anyone making (for example) $250K a year or more not be eligible to draw Social Security or Medicare. I could go with that, no problem and I have been paying into Social Security for 50 years.
So now, there will be no movement on immigration reform this year so that the Republican Party can again focus its efforts on dismantling Obamacare. That failed formula is idiotic when there are so many important things to get done. The Party is in full self-destruct mode and it is truly sad because this country needs two strong parties to sustain a National debate and keep this country moving ahead. The whole damn system is broken, including both Parties, the Congress, and the people that elected them. That is why I am now an Independent after having been a Republican for 50 years.
Post a Comment