Commentary
Don't lump all the rich together in the same 1-percent boat
By Brandon Ferdig
Brandon Ferdig, Minneapolis, writes for The Good Men Project and blogs at New Plateaus. He is writing a book about his experiences in China.
France's new Socialist president, Francois Hollande, is raising taxes on the wealthiest members of French society. This is music to some folks' ears, but to others the music sounds more like the theme to "Jaws." It's a matter of perspective, dependent on how you see the rich.
Indeed, there are different ways to get to the top, and there lies the disconnect in reactions to this news. And this disconnect is very polarized today, given recent indications that the middle class in the United States is shrinking.
Tough economic times (caused in part by some rich people) have the less wealthy eyeing the more fortunate with a mixture of scorn and jealousy. When rich and poor are polarized, it's no surprise that all the rich get categorized as the enemy: the 1 percent.
But while some rich get to be so at the expense of the middle and lower classes, and while they do pressure their governments to create the rules in their favor, this doesn't define the majority of millionaires out there.
For most rich people, wealth is an indication of how hard they work, of what they do with their money and the resulting growth they generate in the economy and the job market. A salesman gets a 10 percent commission and sells a ton of product; an inventor creates a device that makes life better for others; a business owner expands and can now offer jobs to more workers. These folks are the lifeblood of an economy. And as they increase the size of the pie, they should be rewarded, and we should be thankful for them. Without them we couldn't work our eight-hour work day in an air-conditioned office, have enough extra money to buy iPads or the resources to provide education and a social safety net. Laborers make the economy go, but these rich are responsible for seeing it elevate from the agricultural to the industrial to the electronic.
This may sound crazy in these economically trying days, but it would actually benefit a country to tax these rich folks less. Let these doers, these job creators, these wise investors, keep more money, because they're doing a wonderful job with it — certainly a more efficient job than government would do.
But people who don't like the rich either don't understand this or only focus on those who get rich at the expense of others. It's understandable that people conflate the two, but there's a big difference between a Goldman Sachs executive and, say, John Mackey, the founder of Whole Foods. While taking your frustrations out on the rich, you're going to harm all the rich, and this will include taking away resources from those who use them best for all. It's cutting off your nose to spite your face.
The idea is to grasp this difference.
Our inability to do so allows this sloppy idea that it's simply the rich vs. the poor. It's simplistic and inaccurate when both the poor and rich work together as they do so often. It's incomplete to see the rich as all Goldman Sachs types; similarly, it's incomplete to exclude them when considering the upper class. Both the rich-defenders and the rich-haters are right in their own way, given what they're focused on. We can broaden our perspectives to include both truths.
Our common concern should be eliminating the ability for the "bad" rich folks from fleecing the poorer. Eliminate the enabling laws, prosecute those who steal, use the power of organized labor to stand up to abusive bosses, and enforce sensible regulations for working conditions. In other words, stop doing what's been done so much in U.S. history: using government to help allow the bad rich to thrive.
Comments (4)
Lets see, we have the lowest marginal tax rate in history, with the top rate at 35% (lower than under Reagan).
We have the Bush tax cuts, which have been in effect for 10 years, and yet we continue to have high unemployment (maybe those job creators are just waiting), so yeah sure, the rich create lots of jobs with their low tax burdens, give me a fu**ing break.
In 2009 the top 400 earners were paid an average of 202 million (that is the average, one hedge fund manager brought home 4 billion, and paid at most 15%, but that seems fair right). Of the 400 6 paid no income tax, 86 paid between 0-15%, and you want to give these folks more tax breaks. Your insights are staggering in their simplicity.
While I understand you thoghts I am inclined to disagree. As the poster above me state rates are at a all time low, also our tax system has created a way for the wealthy to maintain there wealth with out doing any of the wonderful things you describe. Plus you have establishe that middle just as much established the middle class as working american buying there iPad when in reality they are not buying anything but living of credit. Middle and lower class individuals and groups rarely are saving, more often then not they live check to check and have increasing debt. Often due to unfair wages and vast difference between the workers and CEOs, but...maybe by the thought process of the article they dont work hard enough?
This commentary is positively sophomoric. Yes, not all reach people are the same, not all people gained wealth in the same way. That's lovely and obvious. What does the author propose? That we tax slackers and corporate bandits heavily while rewarding innovators and jobs creators? Brilliant! I want to be the arbitrator of that.
I challenge the author to produce real evidence as to his economic beliefs. The ideas of tickle down economics are often touted, but rarely backed up with evidence. They make for nice talk, but without evidence that is all they are.
What the author also ignores is the fact that public goods, like education, transportation, safety and rule of law all are the raw materials needed for innovation and economic success. When someone makes it big, part of that success is invariable do to factors beyond their own activities.
I'd love to see the author produce some actual evidence for trickle down theories and some actual policy proposals, including implementation plans. Not all people are the same at any income bracket, that's true. Do you want to develop tax codes based on character to account for that?
I keep hearing that tax rates are at an all-time low, but I've also heard that in the past, when tax rates were much higher, it was also much easier to get around paying those taxes. If that's true, then the rates may be lower now, but the actual taxes paid may be higher.
Brandon, thanks for making the distinction between the wealthy and the government-attached wealthy. That speaks to the basic distinction between free-market capitalism, one the one hand, and fascism (i.e. big-government corporatism) on the other. It seems like corporatism often gets conflated with capitalism, and then people who oppose corporatism will mistakenly demonize the free-market, when the free-market is, in fact, the antidote, and the polar-opposite, of the sort of corporatist/fascist system we live under in these times.
Well done. Good article
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