Saturday, June 18, 2011

A rant in defense of progressive taxation

Best way to fund government, benefit society, through progressive model

This could be described as a rant of sorts. I'm doing something I never really do on Political Heat -- going into a blog post with no coherent plan.

The reason I'm doing this is because I have a general feeling I want to express, a feeling of discontent that needs to be addressed. The best way for me to personally do this is to simply write-it-out, get my thoughts out there in written word.

I'm upset with the current state of the world, specifically our nation and our state. We're the most affluent country in the world, and yet so many continue to struggle. We're home to the most billionaires on earth (we have a full third of the total), yet almost 15 percent of our population is living in poverty, including more than 12 million children.

Despite these conditions, despite the enormous gap in wealth between the rich and the poor, there are some who think it's not enough, that the rich deserve to control even more. But when the top one percent of wage earners control more than 40 percent of the wealth in this country -- or when the bottom 80 percent of wage earners control only 7 percent of it -- something is wrong.

The common meme among conservatives is that any raise in taxes or new social program to help those in need is an assault on a person's livelihood, that it's somehow a socialist redistribution of wealth. But with the distribution of wealth as it is described above, with the reality of a system that is killing off the middle class and the American dream, isn't it the duty of governments to determine what is and isn't an obscene distribution of wealth? On the one hand, yes, forcing rich people to hand over a large chunk of their paychecks is wrong. But is it wrong to ask of them to give a certain percentage of their paychecks after a certain amount is earned? If we say "If you earn more than $200,000, we believe you should pay X percent of every dollar after that," is it an unfair redistribution of wealth?

A vast majority (two-thirds) of Americans believe we should raise taxes on income earned above $250,000. This isn't some socialist plot we're talking about -- the majority of Americans don't consider themselves socialists, but a majority of people do believe in a progressive form of taxation, that the rich ought to pay more than the poor.

It isn't about equality of wealth (because most people would tell you that wouldn't work anyway) but rather equality of opportunity. A child born today to a poor family has little chance of succeeding completely on their own. But through generous programs (food stamps, health care assistance, etc.) the family that is unable to fend for itself suddenly sees some burdens alleviated slightly. Through continued governmental help (student loans), the child is able to gain an education that can push him to realize his full potential.

These programs can be funded through taxes, with more being paid by the rich. But how can we justify a tax system which expects more to be paid by the wealthiest? Simple: an extravagant life diminished by a higher percentage of taxes is still extravagant. Taxing the rich a higher amount proportionally than everyone else still leaves that group of people rich. If we were to tax them out of their income bracket, that'd be another thing altogether -- it'd be an unfair hindrance upon their lifestyles, a way of life that they had earned having. But telling a billionaire that he might only be a multimillionaire after his taxes are paid isn't something that should be of heavy concern -- that single person is still able to live the life of several thousand Americans living in poverty pooling their economic resources together.

It comes down to this for me personally, and I believe that many feel the same way that I do: at some point a certain amount of wealth and extravagance becomes grotesque. And the free market would have the wealth gap grow even more if it could have its way. Consider this: between 1990-2005, the average pay (using 2005 dollar figures) for CEOs went up nearly 300 percent. Profits for corporations went up more than 106 percent. But how much did the average worker gain? A mere 4 percent. And minimum wage actually went down (again, in terms of 2005 dollars) by nearly 10 percent.

How is that fair? I'm not going to say that we need to tie CEO and workers' pay together proportionally. But perhaps moves can be made to ensure that workers who are clearly being left behind have mechanisms and institutions available to them to help in their needs. If a family struggles between buying groceries and paying the rent, food stamps should be an option. If health costs are out of reach, or a pre-existing condition prevents a family member (or members) from being treated fairly, affordable health options need to be made accessible. If a student that is academically gifted wants to further their education, they should be given the tools and resources needed to enter a college or university.

Our country is great for a myriad or reasons, none of them strictly of one ideology or the other. We pride ourselves on our individualism; but we also are strong because of our collectivism. Capitalism has made us strong, but so too has our ability to help others in dire times. We needn't be fearful of a little influence from each side of the economics debate -- but extremes in either direction can be dangerous. A stifling of capitalism can be very detrimental to the American way of life -- but so too can an absolute adherence to free market principles that can cause harm to both consumers and workers.

A balance can be achieved. It's a balance that may need constant correction as time dictates it, but like the Mayflower traveling across the Atlantic Ocean towards the New World, constant correction is required of government. We cannot say that a strict percentage of this amount is good twenty years down the road. The Bush tax cuts may have been good policy for about two years, but right now they're killing our country. As the needs of certain times dictate it, government should be empowered to correct society's ills as they come along.

Certainly people should be allowed to shoot for certain objectives in their lives, including the obtaining of wealth. But at a certain point, extreme wealth comes at the expense of society overall. Taxing a proportion of extreme wealth can benefit society while still causing no harm to the rich in the end. We needn't unnecessarily fear a progressive form of taxation.

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