We're probably headed off the 'fiscal cliff,' which may be worse for economists and wall street investors than for the average you and me. But wait! I forget! I AM one of those wall street investors. Yes, it's all in my pension and IRA mutual funds. Someone else worries about it for me day to day, actually many someone elses who make their living doing that, which means I make less. But hey, we're all in this together and they have their skill and I have mine, and that's the way complex economies work.
I've always perceived America as a Democratic nation, not a capitalist
nation. I do not equate the two. My patriotism is not attached to
capitalism, but democracy. For me, the deeper value is the common
good. Yes, wages ride on the market. It there is no safety net, people
will take any wage to survive. And yes, businesses will pay a higher
wage to get the workers they need, up to the limit of their earning
capacity. They will also seek to find ways to reduce labor, for after
all, it is their highest cost. One way to do that is to export jobs to
places where they can pay lower wages, sometimes for even higher quality
productivity. If business owners are doing well they will likely pay
themselves more. Business is business. And yes, it's the American
way.
So, the way a progressive-tax society 'caps' earnings is NOT by limiting
them, but by taxing those who earn more at a higher rate than those
who earn less. As a pastor in an urban-transitional neighborhood I work
every day with people trying to live on $12,000-$18,000 a year in
EARNINGS. They simply cannot pay more taxes. Some suggest eliminating
income taxes and replacing them with consumption taxes. Problem there, is
that the lowest income people are the highest percentage consumers, and
they are buying mostly basic survival commodities. We have a consumer
economy, so the middle class is holding it up and would have to even
more. Rich folks are the ones who have more disposable income, so are
more able to pay higher tax rates. Yes, we hope they are reinvesting
much of that income in production, thus creating more American jobs. But the
economy is global, so that is not working for us anymore in the ways it has in
the past. Progressive taxation has
worked well before and can again. Business reinvestment in production
is a protected 'loophole' and should be.
But any way you look at it,
globalization will continue leveling America to the rest of the world.
The developing world way includes a wider and widening gap between rich
and poor. We are way past the rest of the world on that now. Is that
where we want to be? I don't think so. So, I am in favor of more progressive taxation. John D. Rockefeller made railroads and made them run. He paid 92% in taxes. At the same time he was able to build Riverside Church, a magnificent edifice in New York City, and he did much, much more for the common good. He still died rich. I'd love to be a philanthropist. But I don't play the lottery. And I decided long ago to use my directive/entrepreneurial skill set to take a pastor's wage rather than run a business. So, I give in other ways.
Obviously, I am no economist. Much of what I hear I do not understand. Promoting the common good seems like common sense to me, but maybe it's more complicated than I think it is. The capitalist logic of rising boats, or trickle-down, has NEVER made sense to me. Seems to me we are all on one boat together, in one sea. My observation is the water flows downhill from the little purses to the big purses, or from credit unions to Cayman Island bank accounts as the case may be. So, redistribution has never seemed a nasty word to me.
