Forum Post: A Simple Principle
Posted 13 years ago on Oct. 4, 2011, 12:20 a.m. EST by krosem87
(1)
This content is user submitted and not an official statement
Expecting equality of outcome in a society is unworkable and unfair. There will always be those that excel and achieve more in life and those that don't. Being rich isn't in of itself morally wrong as long as you obtain your wealth in an honest way. However, I laugh when I hear the elite on television talking about class warfare when their threatened with higher taxes because economics is nothing but class warfare. The rich have been perpetuating class warfare with great success on the poor for centuries.
I propose a new way to look at our tax system based on a simple principle. That we should pay into society what we take out. If the top 20% control 85% of the wealth in this country shouldn't they be paying 85% of the taxes. If they are not paying 85% (which they aren't) than that means that their tax burden is being taken up by the other 80%. An easy way to simplify our taxes would be to take everybody and divide them up into what percentile they are in relative to the rest of the country. Whatever percentage of wealth that percentile controls is the percentage of total taxes collected they have to pay. Pair this tax structure with a balanced budget amendment and we could keep our nation out of debt and protect our social safety net. This would also decrease the chance of fighting unnecessary wars as the rich would be the ones paying for them.
Just saying that you want to raise taxes on the wealthy makes people feel like we are trying to punish success. But I can't think of a fairer and more equitable way to tax people than this and its based on a simple principle that I believe many people will agree with. You pay into society what you take out.
Most wealth is inherited. Spare me the Horatio Alger BS. That is the exception. The progeny of the wealthy enjoy income and leisure together. I see nothing wrong in dispossessing the idle rich (I assume you would include them as having come by their money honestly) to meet the needs of the many. Inheritance is an "entitlement" protected by law.
Punishing success? No, I would not punish someone because they raised a good child. "Success" in the US/capitalism means stepping on those below you to ascend one level higher in the scheme of economic hierarchy. I think it should be discouraged. It is sociopathological.
Taxation is not only about balancing budgets and meeting peoples basic needs (the social safety net in the US is a sick joke regardless), but rather a way of protecting democracy. During WWII the wealthy paid 94% of income in excess of what today would be about $365,000. It declined only slowly in the following three decades. Nonetheless, political control remained vested in the hands of the ultra wealthy who clawed back ever penny and more in my lifetime. Paying high income taxes did not stop the rich from pushing for war. If they had to part with much of their underlying wealth, that might be a different matter. "If the top 20% control 85% of the wealth in this country", then you have no democracy. You may not care about that.
Being rich means you have the ability to control the destiny of others. Others will be forced to work (often in slave-like servitude), because in order to survive, they must put their human capital to the service of those who have a preponderance of physical/financial capital.
"Success" isn't necessarily wrong. Capitalism, monarchism, and hierarchy are. Equality of opportunity is completely absent in each. It is as wrong to be rich as it is to be a monarch. There is little relevant moral difference. The Rothschilds live like…well, you finish the sentence. I do not believe in the divine right of the “Successful” to keep their money or rule over me. Apparently, we differ on that minor point.
If your solution is to hike income taxes on the rich (I'm all for it, but as illustrated above, it isn't enough and is easily or eventually reversed), it is better to shatter the moral fiction that everyone is entitled to the money they earned legal or otherwise. I have worked hard and received little and I have worked little and received much. Proposing to tax income on the basis of wealth would be something many, including myself, would consider an improvement. Having regard to the above, my several years practicing tax law and your concern for simplicity, it would be more logical and intuitive to tax wealth and leave income relatively unscathed. It would have the beneficial economic effect of forcing the wealthy to make the best productive use of their assets (or lose them) while encouraging others to work hard. It would whittle away at ridiculous inheritances and restore a semblance of popular control. Very high incomes could be taxed progressively as well.
I agree that all outcomes need not be absolutely equal. Special allowance should be made for those that work harder (definitely not how remuneration works in markets) and who make contributions that benefit the many. These differences should never be so great as to deprive people of equal rights and equal opportunity.
When and if you become an entrepreneur krosem87, and I am sure you are not now, you will understand that if you are taxed to the point that there is no incentive to make money, you will chose to make less money (however you can accomplish that). If an entrepreneur, or let's make this more palatable, a small business person, who will pay your proposed high tax rates decides it is not worth the long hours and hard effort to build a business if the government will take it to use for what, fairly or unfairly, is perceived as worthless and wasteful programs or worse (sorry to say this b/c it will push some buttons) to give those tax revenues to people who chose not to work, then that small business person will chose not to go into business. Consequence: a lot less jobs (and if you tell me they are meaningless, low paying jobs then I tell you...move to effin China and then come back and tell me about it) for you and me.
Interesting concept