Every now and again, I come across a fellow blogger, social forum crawler, and fun to debate with person that, while I would normally respect, comes out of the blue and blows me away with an opinion formed and expressed in a manner that I had not expected.
Sometimes this surprise is not such a great experience, but this time, well Mark From Stoneman's Corner dropped my jaw with his comment on a debate about wealthy, taxes, and paying a "fair share" over at BlogCatalog (you really should read the debate to get a better sense of the context). I will let you determine for yourself how best to interpret this commentary, but all I will say is this, Mark is highly educated, well researched, versed in history, and well written. I interpret his assessment of things with a great deal of respect.
Without further ado:
I disagree with the argument about our poor abused wealthy, but I'm not going to get into those numbers.
What I miss in such an argument is any mention of U.S. payroll taxes (Social Security, etc.), which even someone on minimum wage at $13,000 per year pays at the same rate as someone who earns much more. In fact, there's an upper limit to payroll deductions, so, in fact, the burden of this crucial tax (the one we all pay, no matter how poor we are) is not shared equally. (And if you're self-employed, we can talk about the onerous Self Employment tax, unless you're one of the wealthy who doesn't have to pay at the 15+% rate that the rest do.
I also miss the issue of consumption taxes, which are anything but progressive. And then there are corporate taxes. And there are not just tax rates, but the question of growing income gaps. Basing such far-reaching conclusions on such a limited set of economic data is not credible.
There are arguments about trickle down economics, I know, and we can't raise taxes so high that capital deserts the country, but we might reach a point in our lifetimes where those at the bottom and middle feel like they're in a drought, And it could be, if the wealthy aren't careful, that there will be a reaction on the streets. In general, it is better for social stability if the wealthy shoulder a bigger share of the burden than others. It is namely a wise investment, because what would their wealth be worth without social stability? Seen from that point of view, the wealthy also get more than the rest of us from the rule of law, so investing a bit more is not only in their interest but also fair. (My take on this is informed by European history, but listen to the second segment of the Diane Rehm Show, the one with David Sirota on "The Uprising" here.)
Did anyone notice when billionaire investor Warren Buffet said that there already is class war in America and his class is winning? He didn't think that was a good thing either (source), and I suspect that applies not just for morals, but for social stability, which in the end is necessary for any economic enterprise's bottom line. In other words, besides avoiding too narrow an economic set of data, we have to avoid too narrow a context in which to make sense of these factors. Fortunately, I think many wealthy understand the links that their would-be apologist here does not.
This criticism aside, I agree that the debate in the foreseeable future will slowly but surely move from yes or no to new taxes to an assessment of our tax system, including new ideas about how the burden is shared. I don't see any other way we're going to be able to achieve even the most minimal goals this society wants government to accomplish.
Well said! I am looking forward to a blog post on Stoneman's corner about this very subject.