Does the American Middle Class Really Believe in Wealth Redistribution?
After watching the third presidential debate between Senators John McCain and Barack Obama I can’t get the simple question posed in the title off of my mind. Does the American middle class really believe in, and desire a Federal Government imposed redistribution of wealth? Of course, the Government has been doing this at varying levels for years through welfare programs, but what Senator Obama is proposing now is much more direct and obvious. He is promising to increase taxes on the wealthy (defined as those making over $250,000 a year) while lowering taxes on the middle class. He is applying wealth envy as an excuse to unfairly tax those who have proven themselves successful in our society, based on the assumption that many Americans, fueled by greed, selfishness and jealousy want to take what is rightfully theirs from those who have more than them.
I read an article a while ago (If I can dig it up I will cite it here) that posed a question basically the opposite of mine. It attempted to answer the following (paraphrasing): “Why do the Republicans and conservative Christians continually elect people into office who go against their best financial interests?” It is a valid question; the majority of the Republican base are hard working middle class people, who would directly benefit from Barack Obama’s proposed tax law changes. If a candidate is basically offering to save us thousands in our taxes every year why aren’t we jumping at the chance to vote for him? The answer is easy; I believe that the Republicans vote more on principle than their financial interests. We fundamentally believe that an imposed redistribution of wealth is wrong, and should be avoided at all costs. We put aside our selfishness and realize that it is immoral to take someone’s hard earned money and give it to someone else, who did nothing to earn it. Of course another principle that most Republicans hold is that a smaller and less imposing Government is optimal, which means that both spending and taxes should be cut.
I often hear the argument that the rich should “pay their fair share,” and that Obama’s plan wouldn’t hurt any of the rich because “they can afford it.” First of all, the rich already pay more than their “fair share.” The United States tax system is progressive, meaning that the tax rate increases with income. Additionally, secondary taxes, such as the death tax are basically only applied to the wealthy, because that incredibly high rate is only applied to wealth beyond the first $2 Million. We have all seen or heard the figures, where the top 5% of income earners pay some much larger percentage of taxes into the system. I will not repeat them, as to not sound like a talking point spewing robot, but it bears mentioning just to show that there is no question that the rich already pay their fair share. But what about that other point? The one regarding their ability to afford increases in taxes? I simply don’t think that is a valid question. If Target began requesting a copy of my W-2, and progressively adjusted prices higher for all of the junk merchandise that I buy there based on my income, the consumer reporter from the local news would have the story on air that night. There would be protests and boycotts. With a concrete example like that it is easy for everyone to see the unfairness of the system, but that is exactly how our tax code is designed, and Barack wants to push it even further in that direction. Based on Democrat lectures I have heard on the subject of taxes they make it seem like a large majority of rich people are chomping at the bit to pay additional taxes. The way Barack spoke of Warren Buffet I assume that he already has next year’s inflated tax checks written, and is gleefully having his assistant drive them to the post office as I type this. If I were a congressman I would put forward a bill at my very first session that would require the IRS to create a donation system. That way all of those rich Democrats would be able to easily pay whatever additional amount they want to the Government each year. I would even make that donation eligible as a deduction on the next year’s taxes!
I am not going to say how much money my wife and I make per year, though we do pretty well. Still, we are nowhere near that magical $250K mark set by Barack Obama. That means that if he is elected, and if he actually pushes for his proposed tax changes, and if congress actually buys off on those changes I would directly financially benefit from his presidency. In fact, almost everyone I know would benefit, yet the majority of them are not voting for Obama. We value virtue over personal gain at the detriment of another; even that other is a member of the “evil rich.” I feel that if John McCain would stand up, and say that he believes that the American people have enough principle to disagree with socialistic, wealth redistribution propositions he would gain traction with some of those still “undecided.” I believe that a majority of the middle class is better than what Barack Obama has assumed, though we won’t know for sure for three weeks.
October 19th, 2008 at 8:59 pm
I would disagree with one point you make - I believe that we will benefit more in the long run from allowing the free market to do what it does - in other words, McCains plan. Socialism will only end up destroying what this country was built on and originally intended to be. And while the socialistic aspecs of Obamas plan may bring some short term - very short- benefits, rest assured, soon enough, just as Dan says in his post, jobs will be cut, and the costs will be passed on, not to mention taking their business off shore.
October 20th, 2008 at 7:30 am
It sounds like we are in total agreement. There are obviously going to be second, third, etc. effects from Obama’s “plan” that won’t be realized for years. I had another paragraph to this post that I deleted at the last minute that spoke of the liberal tendency to only look at the first order effects of their ideas. As an engineer I have learned that doing a one layer deep analysis of anything is almost never good enough. The inherent complexities of the economic system beg for a deep understanding and impact analysis.