Saturday, February 19, 2011

Tax the Rich Guys

     I have to admit, I'm confused. What I'm hearing is that we have to get the rich guys to pay their fair share.

     Personally, I think the rich guys should carry their fair share of the tax burden. After all, they're the ones with money and can afford to pay. Also, they didn't get rich by themselves; they got rich with help from family and friends, from their school system, their employees, their government -- sometimes literally with lucrative government contracts. It's time for them to give back a little.

     But that leaves me with two problems. First, who are the rich guys?

     They're the ones on Wall Street, certainly, who played fast and loose with the nation's finances then got bailed out by the government because they were "too big to fail." Most of them are not crooks; they are not Nazis. But they were irresponsible. And these people for the most part not only got away with their financial terrorism, but were rewarded for it, receiving bigger bonuses than ever. On the other hand, they're also paying back a lot of those government loans and if the stock market is any indication, they're helping to right the financial ship. Still ... it's hard to have much sympathy for them.

     What about the people who supported extending the Bush tax cuts to the rich? The doctors and dentists, the lawyers and engineers, the corporate managers and business entrepreneurs. These are the majority of people who make over $250K a year and will benefit from the tax breaks. Are these people rich? Should we hate them because they're doing well in this economy? (Also, they're not just guys; fully 50 percent of med school graduates are now female.)

     What about government workers in Wisconsin and Ohio and elsewhere?

     According to one blog -- more than one blog -- they are dedicated but unappreciated firemen and teachers and family service workers. They devote their lives to their community and through collective bargaining have finally won a decent wage, but who now face draconian and punitive cuts to their salaries and benefits and lifestyles.

    But according to other blogs, these "public servants" enjoy benefits that employees in the private sector would envy. And they show no sympathy for poor suffering taxpayers who have larger and larger amounts sliced out of their paychecks to pay their salaries.

     I happen to live with a "public servant." I know she cares about her job and can often be found at home doing extra work that will benefit the taxpayers who pay her salary. And they don't pay her a very big salary, either. I also know several teachers. They work hard. They have a lot of demands on their time. But let's face it, they do enjoy a lot of vacation -- three or four times what a private employee gets -- and I know at least a couple who own weekend houses at the beach, so they must be paid pretty well, too.

     I saw one complaint from a fellow, now 68, who worked for his state government for 21 years. He never made much money. Now he's retired on $36K a year. This fellow doesn't seem rich to me. On the other hand, he retired at age 47 and has now been collecting retirement benefits for as long as he worked, and he's still going strong. I wouldn't call him rich; but I wouldn't say he's suffering that much, either. Would you?

     Here's my second problem. Even if we do get the rich people to pay higher taxes, it does absolutely nothing to address the real problem in this economy -- the unemployment and underemployment in our workforce. The fairest tax system in the world won't produce one job. And we need somewhere around 10 million new jobs -- hopefully reasonably dignified jobs with decent pay and some prospects for advancement -- to bring down the unemployment rate from its current 16 percent (counting those who've given up looking) to a more reasonable 5 percent, and offer some hope to our young people and secure the future of our country.

     Who's got some ideas for that one?



Kay Dennison said...

Your friend is really blessed to have a pension like that. Most people don't. I think that the point is that these people fought for what they have in terms of income and benefits and can't afford to give it up nor should they have to do so.

I'm retired on disability because it reached a point where between my many years of being a stay-at-home Mommy who spent her free time volunteering in my community and only worked outside the home sporadically until my divorce (no alimony) ten years ago. No one wanted me because I was over 50. As it was, I worked some crummy part-time jobs until SS decided that I had a disability that at the time, I'd had for 30 years. That means my idea of rich is skewed -- almost everyone is rich to me. However, I more or less think that those making over 500K should have the hell taxed out of them -- say 30-40%. In my mind, he/she would still have a pretty nice life if they don't require 6 houses or 16 cars and a full staff of servants. As I said, I don't understand rich --the concept escapes me. I'd die a happy woman -- at least financially --and could be down right ecstatic if I had 20K coming in annually because it would mean I could have a bit nicer life without having to deal with the welfare system and live somewhat better than I do now. I'm not complaining. I have learned to stretch a dollar until the eagle grins and live better than most in my 4-figure bracket. One of my guy friends calls me the best-dressed poor girl in town. lol

Economics confuse me, so I'm not certain what the answer is but it seems to me it's wrong when people making 30K a year are paying a larger percent for taxes than a millionaire. Doing away with collective bargaining would reduce our work force to poverty and our country to Third World status.

I know I rambled a lot and I hope I made an iota of sense but I'm tired after a long day and so is my poor damaged brain.

June said...

I have no ideas for fixing the country's/world's economy.
I just want to live long enough to retire on my public servant's pension of $14,000/year.

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Dick Klade said...

Defining who the rich are, I think, is pretty easy. The top one percent of Americans earn more income than the bottom 50 percent, a pretty good indicator that the top one percent are our "rich guys."

How to stimulate more employment is a lot tougher. One thing's for certain; throwing a lot of public servants out of work through draconian tax cut measures will make the situation worse, not better.

Our economy has survived almost a doubling of the workforce since the 1960s when women started entering the job market in droves. We probably won't again experience the need to absorb that huge an infusion of new workers.

One solution might be to lower the number of new jobs needed by enacting a universal national service system requiring all youths (men and women) to spend two years in the military or in needed service work. That could at least stabilize things by removing several million job slots from the picture.

Sightings said...

Well, I am something of an economist -- not officially, but I did minor in economics in college and later got a master's in business. And I can say with assurance that, except in very unusual circumstances, millionaires DO pay more in income taxes -- a lot more -- than people who make 30K a year. The irony, of course, is that it's a different story with the payroll tax. People who make 30K a year pay Social Security tax on ALL their income, while millionaires pay on only a small portion. Millionaires may pay more on an absolute basis; but a lot less on a percentage basis.

That said, I don't know how our representatives extended the Bush tax cuts to people making over $250K a year. That's, what, 2 percent of the population? Yet they got over 50 percent of the votes on Capitol Hill. Go figure.

Meanwhile, thank you Anonymous. Whenever I see an anonymous comment on a board, I suspect it was entered by the bloggers themselves -- esp. if it's complimentary. Really, this was not posted by me. So ... thank you Anon.

And DK, I think you have two good ideas; however, they may be hard to put into practice. Who are the top 1 percent? Do you judge by income? By wealth? Do you adjust by family size, or by geographical variations in the cost of living? I'd guess if you make $100K a year, you're in the top 1 percent in Florida; but struggling in the middle class if you live in New York metro. And it would take a big change in the national attitude to enact a universal national service system ... even tho' it might be good for all of us.

Anyway, thx. for the comments!

Janey B said...

Great article and great comments. I personally support a flat tax, exempting the first 50K of income. That would truly be "fair share." I also have to say that I disagree with your comment that millionaires pay more taxes than average earners. Warren Buffet once said his secretary paid more taxes than he, and recently GE posted earnings of 14 billion in one quarter, but paid not one dime in US taxes. This is because of the loophole system and an outrageously complex tax code. Simplify it, and see what happens.

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