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…even for the wealthy

Mike Tomlin

It has become a new and bonafide pejorative. Wealthy that is, along with rich. As in tax cuts even for the wealthy. It is not a new dislike, but it is a harmful and misguided one, to not appreciate those who have money and not let them have it and spend it. It is the fuel of our economic system after all.

To be sure I am not one of them. Not a billionaire, nor a millionaire, nor one who makes the hotly bandied about $250,000 a year. Not even close. No Rolex or BMW, although those are not the metrics of wealth they once were, because capitalism works and many working people can afford either or both. That is a success story never told.

But once the tax discussion (read argument) gets past the name calling it settles in for a moral discussion on people paying “their fair share.” My elderly mother is a retired LPN, living on $19,000 a year and she pays nothing. Yes, she worked her whole life, or most of it, and other than my sister and me has little to show for it. Except of course a pretty good life in the best nation in the world, and now she pays nothing. What is her fair share?

It seems even the least able earners should pay up some ante each year. Maybe a $25 a month minimum. I think that is fair. What is fair for me? Well I pay thousands to state and federal, and TurboTax tells me how many. So I guess that is fair. But should fairness kick in with income, or with age?

I think it would be “fair” to waive taxes on all over 80. They’ve done their part. Or we could do a nice fair income formula. Let’s say I pay $30,000 a year – simply cap taxes at 10 times that. Regardless of income no one pays over $300,000. I can argue that is fair. After all, how much more national defense and roads do the rich get than me?

But “fair” will never be a settled argument and it is not really the issue either. After years of consternation and pedantry about tax plans I learned this year how wrongly I viewed it all. One phrase and I was a newly learned man. That phrase – “there is no evidence the high end tax cuts worked.” Aha! Enlightenment. Tax cuts are supposed to “work.” Now I get it.

And they are so sadly wrong. Setting tax rates should not be day trading. We shouldn’t be using tax cuts (or increases) as positions that are supposed to “work.” The very concept is obscene and destructive to our economic system.

Taxes should be set to fund the costs of the required and essential functions of government, understanding that we benefit equally from it. We all receive the same Naval services, yet not the same Medicare. That is fine.

As a wealthy and compassionate people we can add a bit to care for the elderly, wounded and infirm. Then if we want, a buck or two for reinvesting in our culture through the arts and humanities to support the philanthropy of the wealthy who exercise that privilege.

But inflicting tax increases or decreases with some strategic position of it “working” is a losers game from the get-go. Our economic system is dynamic, and our tax system must be static – set them and leave them be. That will allow those who know how to make money to do so, and it is the making of money that provides for the paying of taxes, and yes, not just “even” but especially for the wealthy.

About Michael Tomlin

5 comments

  1. Bah, your site makes my firefox crash all the time

  2. Native,

    Thanks for the clarification, but that is my point. I may not have made it clear in my writing. I would be equally opposed to such a policy if it had “worked.” I agree entirely that the wealthy do not generally have traditional income, and do not “use” tax cuts as I might. But I want a tax law that is not day-trade fashion changed trying to get it to work.

    The only thing worse than tax law manipulation not working is for it to work.

    Abortion works every time, yet people oppose it. Capital punishment always prevents repeat offenders, yet people oppose it. Shooting intruders at your doorstep always works.

    I favor a tax law that is blind as our justice system is supposed to be. A proper tax for all to support essential and majority desired services, without knowledge of means or wealth. If the proper tax law were imposed it would neither work nor not work – we as earners would adjust our spending and investing styles long term based upon the confidence that tax law would not soon be manipulated.

    Ahhh, Santa, bring it please.

    Thanks for your comments, and for Kent’s and Mr. K’s., also.

  3. Mike,
    I think you missed the definition of “works” in this context. As I read and understood the intent of the tax cuts it was about allowing those at the upper end to retain more of their money because they would “invest” that newly acquired wealth in things that would ultimately create economic growth – facilities, equipment, ideas, people, etc. Not only did that not happen (this is what did not work) but they invested that wealth in new ways to make money that produced no tangible products or services that would produce revenue and sales and yes, more wealth. Instead the things they invested in were the alphabet soup of so-called financial “paper” that in large part caused the biggest downturn since the Great Depression. What the economists on both sides are now saying is the money upper income folks got to keep did not produce the economic growth that was predicted and may have in fact added to the economic crisis because of what they did invest in. That is called “not working”.

  4. Mike,

    Mr. Knowledge rejects the implicit (maybe explicit) assumption of your article that “criticism” of “the rich” is “pejorative.” I also can’t’ bear to read that what we ought to do is “appreciate those who have money.” Ugh, it’s almost Christmas, aren’t the meek supposed to inherit the earth?

    Seriously, sentiments like this (intended or not) appear aimed at insulating one end of our economic spectrum from criticism, which is just what many of them would like. And why not, given the role so many with buckets of cash played in crashing our economy?

    I am not disputing that there are a lot of people with a lot of money in this country who do genuinely outstanding things and contribute to our nation. There obviously are, though I will let my biases slip and say that I’m much more inclined to heap this kind of praise on people and companies that actually produce things that people want, as opposed to heaping it on people like hedge fund managers and other financial titans who basically gamble with other people’s money and make out like bandits.

    Given the demonstrably devastating effect this type of speculative financial activity has had on our economy, I’m all for any tax policy or statute that reigns this kind of behavior in.

    I don’t like the idea that we should heap praise on people just because they have a ton of money (there are good people with a ton of money, there are bad people with a ton of money), or kiss their fannies by being deferential and keeping their taxes as utterly low as possible and their economic conduct as unregulated as possible.

    Last, it is entertaining to view the evolution of those who once argued that tax cuts for people with more than enough money to sit around and do nothing for the rest of their lives would unleash economic growth for all. Now we are told that it has never been about whether tax cuts for the wealthy have “worked.” Historically, that was always the justification for cutting taxes on the super wealthy, a position which I guess has now been jettisoned because it is so obvious that those policies didn’t help the middle class. The abject failure of the “trickle down” concept says plenty about the arguments of those who now say the issue isn’t about whether tax cuts for the super wealth “work.”

    The day when flaunting one’s wealth is again considered gauche and classless can’t come soon enough for me. There are too many people in our country who think money alone makes them special and that they should be treated differently because of the “success” their wealth demonstrates.

  5. So based on fairness where would the funding of our national infrastructure fall. Should I pay the same to fund interstate construction and maintenance to satisfy the occasional travel to see Grandma at Christmas versus the capitalist (aka rich, wealthy) that ships disproportionally thousands more truckloads (lbs) of product to market?

    I believe in strong national defense to protect our shores but should I be expected to fund overseas “conflicts” and stability when the true underlying purpose is to protect overseas “interests”. I personally don’t have any direct overseas interests but I’m sure Halliburton, Exxon, and others do. Shouldn’t those capitalist that do have overseas interests (assets) that need protecting be expected to pay more, which their overseas subsidiaries are not paying?

    Should I receive more social security benefits or Medicare coverage than the wealthy receives because a larger portion of my income went into the system? After all I’ve never had the luxury of having social security deductions stop (aka more disposable income) because my annual income exceeded the cap limit.

    Let’s have a candid discussion on a flat tax base on a percentage of ALL income that contains no deductions, no exemptions, no loopholes, no limits, and no advantages. And because the wealthy are tricky little devils, let’s also make sure tax is applied to money that is funneled to off-shore accounts or off-shore subsidiaries and companies. That would be a discussion of fairness and would satisfy your question of what your mother would pay vs. what you would pay vs. what I would pay vs. what the “wealthy” would pay.

    Perhaps we, as a nation, would not be having this tax discussion if you had only written this editorial in 2001 and again in 2003 when the tax rates were cut (might I add, disproportionally more for the wealthy). I agree arguing tax increase vs. decrease is counter-productive; the current gridlock (fiasco) in Congress is evidence of the fact. Prosperity (budget surplus) prior to 2001 should also provide some evidence of how effective tax manipulation worked, or didn’t work. Especially when complimented with Government growth restraint (not a Reagan or Bush legacy).

    I fall in the camp of letting the Bush tax cuts expire for all. As a nation we have more pressing matters to legislate and the debt caused by a budget deficit has much larger long-term implication. Unfortunately my representation in Washington is not listening to me or the other 50+% of the nation that believes in the tax cut expiration – no surprise there.