There has been a lot of talk about the redistribution of wealth in politics of late. Mostly this is a kind of political talking point, a way to garner support through fear. If you begin to talk to just about anyone about redistributing wealth, they most often think your talking about their wealth.
But the truth is most of us are not wealthy, at least not enough to spare any for redistribution. In fact, most of the people in this country are not even close to wealthy. Without throwing too many numbers around I think it’s fair to say that anything below $150,000 in yearly earnings is not in the running for wealthy. Upper middle class perhaps but not wealthy. Although recently in a vehement defense for Wall street bankers, a Fox news contributor exclaimed that $250,000 was “barely scraping by.” Where does that leave me, scraping or scraped?
Wherever you draw the line between wealthy and the rest of us it does seem that fewer people are wealthy in America, but the ones that are, are wealthier than ever. According to recent studies the top median income, which goes to one tenth of one percent of Americans is just over 26 million dollars a year. That’s not savings and investments, that’s annual money coming in.
The median income for the top 10% is about 1.1 million dollars a year. Down here in the remaining 90% the median income is about 31,000 dollars per year. That includes the lowest 20% who do not make what is termed a “living wage” or enough to pay for food, shelter, and other necessities, America’s poor. Does 20% of Americans being too poor to provide for themselves surprise you? Well, maybe they’re all soulless lazy drug addicts, feel better?
What that means is that 10% of the population controls 2/3rds of America’s wealth. This massive divide between the wealthiest Americans and the rest of us is a recent phenomena, only becoming really serious over the last 30 years. But what to do about it?
It’s interesting to note than in 1945 millionaires paid income tax at a rate of 66% and today they pay no more than 32%. But taxes have a very bad name. They are easy to see as an unfair burden, particularly because it’s hard to see when they’re spent well. It’s much easier to enumerate their wasteful uses. After all I don’t think “Ah tax money well spent!” whenever I drive over the massive George Wasington bridge in to New York City, even though I’d be on a barge or swimming without it. However, taxes seem to me like the only fair way to get some of the wealthy’s riches back to the lower 90%. I’m not talking about handing out checks, it should come back in the form of services, infrastructure and opportunities. I am very uncomfortable about just taking someone’s hard earned money and spreading it around, at least with taxes it’s proportional to wealth. Big expensive houses pay more property taxes than little stinky ones. Huge earners should pay more than those who earn less.
I’d love to leave it up to the “haves” to spend their largesse wisely enough to help everyone have a living wage. But in the last 30 years that hasn’t worked out. And in truth, I don’t see it ever happening. Without a strong government tax policy to keep things more even, the divide is going to continue to widen. For example, during the recession most wealthy investors are actually better off today than they were 3 years ago. That’s great, but that wealth came from our hammered 401ks, foreclosed houses, declining property values and not having to pay so many workers. Money has to come from somewhere. There are just fewer jobs today, industry and the wealthy pay less in salaries now and will continue to because a lot of those jobs aren’t coming back. Is that fat being trimmed? Maybe. But that fat is people, Americans.
However, maybe the poor don’t deserve any more than they have. Maybe we in the bottom %90 are all just lazy or unwilling to work hard enough and are right where we ought to be in the economic scale of things. We get the schools we deserve, the services we deserve and the representation we so richly deserve. Maybe that’s just the way “the cookie crumbles” in the world’s largest economy and richest country. Does that sound right?
I don’t think so. I also don’t think the wealthy are any less lazy than people in the bottom 90% who are working 1, 2 or 3 jobs to make ends meet. And, as a manager of 30 years, I think that most people do work hard, really hard. Rich and poor both work hard to earn their money and they all should be fairly taxed on it. If that’s acting like a blood sucking vampire, then sharpen my teeth.
We are getting thirstier and thirstier waiting for the wealth to trickle down. We’re waiting for jobs that aren’t coming back because the prudent and wise decision is to pay as little as possible for work, and that means cheaper workers in far away lands. Smarter investments mean greater wealth.
Saving jobs and services
How many jobs would be saved if the highest tax rate went up 10%? How many with 20%? How many teachers, firemen, police and civil servants wouldn’t have to hit the streets? These people are not our problem, they’re the investment we’ve made. They represent smaller class sizes and better education, faster response times in emergencies and increased vigilance in our communities. All that education, training, experience and our own comfort that we’re just going to throw away in the name of cost cutting and efficiency. And this is because we’re reticent to raise taxes on either 10 percent or only one tenth of one percent of the population? Doesn’t that sound short sited to you?
I often wonder why raising the taxes on the top 10% is so scary. Do we think the wealthy will all just up and leave the country? Will all those benefits from the top down theories of economics just evaporate? Would we notice? Will the world’s largest economy be destroyed or seriously wounded? Maybe the wealthy will just give up trying to make more? Somehow I doubt it.
It won’t pay off the deficit, nor will it cure world hunger, but it would help. It would save a lot of jobs, those held by dedicated civil servants. I never had that kind of dedication myself, but I’m willing to fight for those that do.
Copyright Prentiss Gray 2011