How to tax the rich
I’ve brought this up in a couple of previous blogs, but I thought it deserved its own special spot. Roger Ebert wrote an artice about the “one-percenters,” which is irritating in itself because I am sure he has much more money than I will ever have, so I don’t know what he has to complain about. But, he is a professed liberal/progressive, so his viewpoint isn’t surprising.
Let me start with making sure everyone knows my political affiliation. I used to believe everything the democrats fed me. Now I best align with the libertarians, which does have a tendency to lean to the republican side except the reasons for supporting policies is usually different than the republicans. An example of this paradigm is in the Planned Parenthood funding. Republicans wanted to cancel funding for Planned Parenthood because they support abortions. Democrats wanted to keep it because of the need for women’s health care for the poor. Well, republicans are wrong because: 1) Abortions only account for about 3% of Planned Parenthood’s funding, and 2) Abortions should at the very least be an option when the health of the mother is at risk, otherwise you could be leaving that unborn child and the already born children without a mother which isn’t a good option either. Democrats are wrong because we now have Obamacare. Anyone eligible for Planned Parenthood should easily qualify for Medicaid or several other programs under the new health care law. If Obamacare covers everyone, then we don’t need a separate program like Planned Parenthood. So the libertarian (and I would say logical) choice is Planned Parenthood doesn’t need federal funding because there are other existing federal programs that take care of those mothers anyway. It saves money and reduces overlap of services. So you see, the solution lines up with the republican point of view, just for a different, logical reason.
To get back on topic….taxing the rich. I’ve written previously about how no matter how high the top tax rates, the collections as a percentage of GDP have never been over 20.6%. Certainly there is a tax rate that could be too low, meaning a point where a higher income person would be willing to pay more without working to avoid taxes but not collected (simple example, 0% taxes means $0 tax income which I think everyone understands some form of tax is necessary). However, there is some point when taxing the rich becomes an impossible tax, because they have the means to either avoid taxes or simply not work (see more here). So is it really fair that 1% of Americans get 25% of the income? That’s hard to say. The conservative viewpoint is that the top 1% (making 25% of the income) already pay 40% of the tax revenue which is more than the bottom 95% of income earners (I guess that really sucks for those in the top 4.99%-1.001%). The liberals would say that’s true, but they should pay even more as they make more. This is a bit less logical since they pay taxes on a percentage, they do pay more as their income goes up. Whatever your viewpoint – it is true the top 1% are making more than in the past.
How do we tax the rich?
Note: Sorry some of this is almost exactly from another entry, but I wanted to emphasize and expand it.
So to the point of this entry. Stop supporting those businesses that make the rich even richer. Start with daily goods. Buy food from local farmers and your local (union) grocery stores. Buy your soap, toothpaste, toilet paper, and other goods from your locally owned pharmacy. No more big screen TVs, Blu-Ray players, iPods, stereos, etc. No more name brand clothing. If we took those actions, Walmart, Best Buy, Macy’s, and Target would go out of business very quickly.
Stop banking at your large corporate bank and open your checking and savings at a locally owned bank or credit union. Stop investing in your 401(k) and open an IRA CD at your local bank or credit union. In fact, make sure all of your investments, including your union pension, isn’t invested in mutual funds or large companies for that also supports large corporations with CEOs making millions.
Make sure all of the products you buy are made by U.S., union manufacturing. Don’t support corporations such as GM, Chrysler, AIG, etc., that received bailouts. Demand your union bosses stop taking $400,000+ salaries and spending millions on campaigns (which goes to rich politicians) and instead put that money to use protecting jobs instead of buying political favors.
Let’s not forget…this also means no Dairy Queen, no Pampered Chef, no Fruit of the Loom, no Geico insurance, or any of the others owned by Berkshire Hathaway. Also, no McDonald’s, BK, or other fast food. Now Buffalo Wild Wings’ CEO did take a pay cut to $1.9 million this year, so I guess that is up to you to decide if she is too rich or not.
My point is not to make a straw man argument, but to point out that we in the middle class still carry the market power. The source of the wealth in this country is our productivity and our consumer power. If you feel like the rich are too rich, then stop making them rich. We all have the choice. Until you start making a conscious effort to move away from supporting those very rich people you claim to despise, your argument of taxation or criminal action against them for making money holds very little water. You can take away their wealth if you feel their wealth doesn’t justify the product(s) or service(s) they provide by not purchasing those products and services.
Personally, I have completely closed my accounts at Wells Fargo and moved to the credit union I worked for. I shop at Target for my consumer goods (mostly) because I still get a good deal, and Target supports the arts and other causes right here in Minnesota, so I feel like my dollars are not completely wasted. I used to buy Levi’s jeans because they were U.S. union made, but now are made in Mexico. Occasionally, you can find some Lucky Brand that are made in the U.S., but it is hard for me to find ones that fit. I buy meat from the local meat market, and milk is generally local no matter where it is purchased.
I’d like to see some comments – what are you doing to tax the rich?