Bonnie Erbe

Democrats’ Meaningless "Tax the Rich" Proposals Will Lead to Class Warfare

July 21, 2009 RSS Feed Print

By Bonnie Erbe, Thomas Jefferson Street blog.

Perhaps Democrats are developing some sensitivity on their "tax the rich" theme. I can't see NOT taxing the rich. It's just that I disagree with the Democrats' definition of rich. The only way to fairly assess all Americans for the ridiculously expensive programs Democrats are pushing is to enact a flat income tax. Then upper-income persons necessarily pay more in taxes, as 10 percent of $100,000 is a lot more than 10 percent of $20,000. But that'll never happen, so tax-hungry Democrats are going the route of class wars.

"Rich" is a matter of more than just annual income. Geography, cost of living, savings, investments, size of family, etc., all play into whether one categorizes oneself or someone else as "rich." So, for that matter, does one's own perspective. If you're living on Social Security disability's $20,000 or so in annual income in New York City, you see someone working 80 hours per week on Wall Street and earning $100,000 as "rich." But if that person is married and supporting her two children and spouse, she's hardly rich after paying close to 60 percent in federal, state, and city taxes and trying to support her family on $40,000.

Democrats from well-to-do districts are finally starting to "get" that, according to the Wall Street Journal. It's about darn time!

"There could come a time," said Rep. Michael McMahon, a freshman Democrat from New York City's borough of Staten Island, when Democrats are in open rebellion. "We will certainly see in the next few weeks where we are going."

Election gains in some of these affluent regions have helped give Democrats big majorities in the House and Senate. Of the 25 richest districts, 14 are represented by Democrats, according to Congressional Quarterly. In 1995, Democrats represented just five of those districts.

So for a dual-income, childfree couple living in Des Moines, $250,000 in annual income might qualify them as rich. But the same is hardly true for a family of four in Manhattan, or San Francisco, or Boston, D.C., and so on.

I don't see Democrats divining a fair way to tax higher-income persons unless they take geography, family size, savings, and investment into account. If they start going into that amount of detail, class wars are certain to follow. It's a losing war for them. President Bush so badly mangled the country and especially the budget that Democrats will run against him for 20 years. But if they don't fix the economy without overtaxing the middle and upper classes, Republicans can starting running against Democrats with the powerful Reagan-era "tax and spend" mantra. Democrats should be smart enough to see that but the Obama crowd doesn't seem to be.

Tags:
taxes

Reader Comments Read all comments (23)

Add Your Thoughts
Your comment will be posted immediately, unless it is spam or contains profanity. For more information, please see our Comments FAQ.

First, let me say this, I said I didn't agree with redistributing the wealth. I've yet to hear anyone suggest that we tax the rich and literally give it to the poor. However, I do believe in a progressive tax system.

I don't believe that anyone "owes" me anything; accept maybe American Express, but that's a whole other discussion ;) But, I do believe a country is more prosperous when its people are healthy and well-educated. As such, the goal of any social and economic policy should be to guarantee equality of opportunity to obtain an education and maintain their health.

The problem, as I see it, starts in assuming that the top got where they are and have stayed where they are because they are overachieving geniuses. And, the bottom got where they are and stayed where they are because they are lazy, dummies. The logical end to the assumption is that leveling the field takes away their natural, biological advantage of being hard-working eggheads. And, if that were true, then I'd completely agree with you.

But, we all know that that's not the case. Sure, there are plenty of Americans who have worked their butts off and, through initiative and ingenuity, made a better life for themselves. But, there are also plenty of people who were lucky enough to born with economic advantages that stack the deck in their favor. The only advantage being stolen from those people is their unearned, economic advantage.

This brings me back to the idea of equality of opportunity; because, equality of opportunity actually increases competition. If every kid had access to a quality education and college counseling services, then there would be more seniors competing for places at colleges. Poor kids who used to get substandard educations would have a fighting chance against wealthy kids with access to tutors and private college counselors. All kids would have to compete on their actual, individual merits. That's a gap I'd love to see closed.

Here's my best analogy: a third grade class project. One child's parent does the whole thing for them. Another child does the project entirely on their own. Although ultimately they will be, we inherently know it's unfair to grade them on the same scale. We would probably all agree that the child who did it all on their own is deserving of a better grade than the child who did nothing, even if the final product doesn't measure up. Certainly, the child who did the project learned more. Now, imagine if that third grade class project was graded on a curve. That poor little guy worked so hard. But, because half the class got help from their parents, the bar was set higher and he got a failing grade.

That's what it's like to be a poor kid in America. Work ethic, my a$$.

Meryl of CA 4:20PM July 25, 2009

In response to Meryl of CA.....

Why do "we still need a solution to the growing income divide in this country"?

Capitalism says, if you earn it, it's yours

Marxism says, everyone is the same. The government redistributes the wealth so everyone is the same.

The consequences of capitalism is that the economy grows, the middle class grows, even if ONLY by 40%, the government takes in more money in taxes....etc.

The consequences of Marxism is that the economy goes flat, jobless rates rise, the number of "poor" explodes because the government takes everything. So much so that there isn't enough to go around so everyone suffers.

What this country really needs to decide is whether or not a person should be rewarded for the "sweat of our brow and the stength of our backs and the courage in our hearts" (to take a line from Pirates of the Carribean). Or, should a person be punished because they work hard or are smart enough to make good investments, etc.

We need to decide what is it that makes a person truly believe that someone else "owes" them something. I'm not wealthy by any stretch of the imagination. My family lives a good life and we struggle just like everyone else....maybe not with the same issues, but we have our struggles nonetheless. I do however aspire to be one of the wealthy someday. But what is the point in working hard and being creative or revolutionary or industrious if all that is going to happen is that the majority of my money is going not to my benefit or the benefit my family but the benefit of those who had nothing to do with my success? Will the poor share in my failures? Will the middle class participate in the risks I take to become wealthy? I think not. Why then should they participate in my sucess and prosperity? (Out the goodness my heart I will give to those who do not have, not out of necessity, but because of the cheerfullness I gain from doing so).

Scott Anderson of OK 2:18AM July 24, 2009

Things may appear black-and-white when you look at them simplistically, however once you dig into them, things become far more complex. With regard to the 'growing gap' there are several reasons for it.

One thing is the worsening work ethic. More and more people have come to believe that they are 'entitled' to high pay, benefits and such as opposed to having to work for them (the primary reason why jobs go overseas). This is part of the general cultural decline of humanity, albeit it's not as far advanced here in the US as it is in Europe and it has yet to penetrate China. As people loose their work ethic, they will be less likely to make more money, instead spending their time whining and complaining about the obvious: life is not fair. At the same time, you have mobility in this system. People who are both poor and determined can rise above poverty and join the 'other half' as you put it. A decline in the number of motivated people in the 'bottom bracket' combined with the poor work ethic is one reason for the lower growth rate.

Another obvious reason is jobs. When the economy goes into a recession, as it did in 2000 and 2007, the most disposable jobs are cut the first. Usually people in the 'lower bracket' fall into this category, as if you run a business, it's easier to let a paper-pusher go than a computer expert, and it's easiest to let a part-timer go. Not to mention, if your in a franchise business like Burger King, you lay off or fire some employees at each store, but leave enough to keep it functioning. Things aren't the same for specialized jobs which require college degrees, or jobs which don't require them, but require several promotions to get. In short, the security of your job, and thus you income depends on how high up on the ladder you are and how your work ethic is. I mean if you have two people doing the same type of low-skill job, the one with the better work ethic keeps theirs in a recession.

"Several years ago Congress placed a 10% tax on luxury boats. Sales of these boats were cut in half and many middle class workers lost their jobs building those boats."

My father told me about that....in how the taxes cut a lot of jobs, made companies go bankrupt and did absolutely nothing to 'punish the evil rich,' the reason why that tax was passed to begin with. The wealthy simply chose not to buy the boats. However those who enacted and supported the tax policies in question still refuse to accept responsibility for the lost jobs and that their plan had no effect, indeed they never repealed the failed tax. Instead they brush it under the rug as if it never happened, content on blaming the 'evil rich,' even when it was the fault of the 'progressives.'

Stephen of WI 1:53AM July 24, 2009

Bonnie Erbe

Bonnie Erbe

Bonnie Erbe is a contributing editor at U.S. News & World Report and hosts PBS's weekly news analysis program, To the Contrary with Bonnie Erbe. She also writes a weekly syndicated newspaper column for Scripps Howard News Service.

advertisement

Cartoons

Robert Schlesinger

No White Knight to Save Republicans

The GOP is stuck with Romney, Gingrich, Santorum, or Paul.

Costa Concordia cruise ship sinking
Concordia Ship Disaster

The Costa Concordia luxury cruise ship keeled over after it ran aground off the coast of Italy.

advertisement