Jack Cafferty asked a rather loaded question in his latest Cafferty File: “Is it fair to soak the rich to pay for health care reform?”
On the face of it, the answer to this loaded question is easy. Since “soak” implies an unfair treatment, then it would not be fair to soak the rich for health reform or for anything. This is a bit like asking whether it is fair to cheat at a game.
A more balanced question would be whether it would be fair or not for the rich to pay a larger percentage of their income to help pay for health care reform.
Since the current income tax system is progressive, having the rich pay a greater percent for health reform would be simply applying the same sort of approach that is already taken. Of course, not everyone regards a progressive income tax as fair.
This, of course, leads to the difficult question of what counts as fair. One way to look at it is that health care insurance is a purchased good and it would be fair to charge people based on what they receive. If the rich receive the same benefit as the poor, then they should pay the same. After all, if a rich person was charged more for a Big Mac or a gallon of gas just because she is rich, that would be unfair.
Of course, health care is not being seen as a purchased good but is being cast by the Democrats as a social service that is owed to people. This would put health care in the same basket as other social services like education, roads, and such. In these cases, the rich do pay more for what they receive. For example, if a kid from a rich family and a kid from a poor family go to the same public high school, the rich family is paying more for the same service because they pay more taxes. This is seen by some as fair, based on the principle that those who have more should contribute more to the general good. Others, of course, see it is unfair based on the principle that the same things should cost the same price.
Since the health care plan is not in a finished form, any discussion about it is speculation. However, I am against the proposals that do call for putting what seems to be an undue burden on the rich. While I do agree that those who have more should contribute more (that is something I practice in my own life), I am against the “soak the rich” mentality. At most, I would agree to the same sort of progressive scale that is used in the current tax system (although I think that system needs considerable reform as well). The reason is that soaking the rich is no more just than exploiting the worker. True, the rich would still be very well off even after the proposed “soaking”, but to justify the soaking that way is a bit like saying that slicing a chunk of a big person is not as bad as slicing a chunk of a small person because the big person still has more flesh left.
I’ll close with a question: what would be fair for people to pay into such a system, rich, poor or in between?
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“(that is something I practice in my own life)”
Really? How so?
Here are a few minor examples: I provide the meal at the weekly D&D game because most of the players make less than I do. I repair and refurbish computer equipment and give it to people (such as students) who cannot afford their own. I provide a place to stay for friends who have no place else to go. Nothing major, I admit.
What amuses me is the elastic definition of “rich.” Now if your family earns $250K/yr you are considered rich. This is totally ridiculous.
There should be another term for the top 5% of earners.
Filthy rich?
I think a flat tax of say 10% for everyone would be fair. Take out tax loop-holes and the such and it would all work out. I just do not feel that the concept of taking extra percentage from someone that has earned it is fair. You can always pay extra if you like.
Actually even more than 95% of the population earned less than $250k (the “filthy rich”?) in 2005. We can see them represented to the right on the x axis on this chart(A) from 2005*:
http://www.visualizingeconomics.com/2006/11/05/2005-us-income-distribution/
We can see an “attempt” to measure wealth here (B)*:
http://www.census.gov/prod/2008pubs/p70-115.pdf
I’ve gotten the impression from my reading that there’s a difference between the terms “rich” and “wealthy”. “Wealth” while it obviously involves more income (riches?) includes net worth,status,self-worth, age, etc. With those added considerations in mind, the number of wealthy (“filthy wealthy?”) people is somewhat smaller than the number of so-called rich people.
“Rich” is the opposite of “poor”; “impoverished” is the opposite of “wealthy”.
We can see the poor in chart (A) above–the 20% who earn “less” than $20000 or so. Also, this chart (C)*
http://aspe.hhs.gov/poverty/09poverty.shtml
seems to indicate, if I’m reading it correctly, that the “poverty threshold” for a family of four (4) is around 22k. For all intents and purposes, the government has decided that in 2009, if you make more than $10.8k you’re not poor and, if you have a wife and two kids, you’re not considered poor, if you earn more than around $23k. Rattling around in my head is the idea that we readily label 20% of the population “poor”-which they clearly are– but we get all pissy when we label between two and five percent of the population “rich”–which they clearly are. With that second labeling we suddenly become very defensive about lines being drawn.
For a straight-up income-to-income comparison, Chart (A) is useful. We can separate the rich from the poor there. But what to do with that information? The government has established poverty thresholds (based primarily on income along with some other factors). But,unsurprisingly, it provides no “wealth thresholds” that I know of. Why?
*I doubt that the three-four year gap between these sources in any way undermines my point.
Sounds like someone is upset that they had to work for a living. If you aren’t happy with your situation then change it. I grew up very poor with a single mom and my sister. I had a great childhood and wouldn’t change it for the world. I’m certainly not rich, not even close, but I have worked for everything I have and I certainly feel I have enough and could live with much less. It is easy to talk about taxing evil people more that have more than you. How is the view from that ivory tower?
Is that directed at me? I didn’t grow up rich (as you know) and I’m fine with working for a living. The view from the tower is just fine-although I’m just on the 4th floor.
Just a few points.
1. Taxing the rich more has historically hurt the economy. Taxing them less has historically helped the economy.
2. Seventy percent of the rich in this country did not start that way. Not everyone was born rich.
3. Not every rich person is rich because he rips people off. It is a trade with employment. Nobody is forced to work. If you do not like it then find another job. I do not care how rich the owner of a company is I work for. If I feel that I am being compensated enough for my work then I can live with it. If not then I move on.
4. The true nobility that benefit from the most sweat of the people are our politicians. They are the truly arrogant that do not even properly do their jobs in most cases. They do not even read bills anymore. If this nationalized healthcare plan passes they will not even be on board. they will have a better one. They do not even pay into social security because it sucks. They know that. They are too good for what the people get.
Again, you lefties sure entertain me.
“Taxing the rich more has historically hurt the economy. Taxing them less has historically helped the economy.”
So I’m sitting here looking at an article that refers to the prosperous post-war period of 1945-1972. I’m also looking at a chart that shows marginal tax rates for the rich during that same period to have ranged between 70% and 92%. Any instances you can present to the contrary wouldn’t seem to erase the fact that during at least that period in history (“historically”, right?) higher taxes on the rich did not “hurt the economy”.
Besides, even Warren Buffet thinks the rich should pay more and ya gotta respect (at least some of us do) the opinion of a man whose stock currently sells for $95397/share. Sayeth the Oracle of Omaha: “Frankly, an economy where my receptionist pays a lot higher tax rate than, than I do does not strike me as a just economy.”
Why, he even thinks the skin you’re born into is one of the most important factors in determining your success. Read about the “ovarian lottery”.
http://tywkiwdbi.blogspot.com/2008/04/warren-buffets-ovarian-lottery.html
You righties “sure entertain me.”
That flat tax horse has been beaten enough. Don’t even bring it up unless you intend to present specifics. Better still, go beat the fair tax horse for a while. It’s better equipped to handle the beating.
What happens to a society when 51% of the people decide that the other 49% should pay the taxes?
We are nearly there.
Hard to say. What happens in a society where the top 10% own 70% of the wealth and the bottom 40% own less than 1%?
The question is, what did the top 10% do right in order to be that successful?
In many cases, they chose their parents wisely. 🙂
Like Bill Gates? Or Oprah? Or Barack Obama? That still turns into an infinite regression; someone, somewhere, did something well to get wealth.
I’ve noticed this to be a major case for Libs: People only do well if they’re cheating, so make everyone equal and there’ll be no more cheating.
Yaaayyy! No more cheating!
Many does not equal all. Gates did come from a well to do family and many critics do see Microsoft as a company that cheated (and cheats) a great deal. Yes, some people bootstrap up and some don’t.
I’m sure there are many corner store owners that cheat, too.
Yes, having parents that teach the value of education, hard work, etc. is a huge advantage.
Also staying married. In grad school I did an informal survey…and I was the only one with divorced parents.
TJ,
Anecdotally, I agree about the divorced parents connection.
I grew up in a poor family, and I can assure everyone that we were poor because of stupid and neglectful actions. I’m for everyone paying the same percentage tax. The idea that people should not reap what they sow is downright dangerous, and I dare say hypocritical because it’s primarily pushed by people who won’t have to do the paying.
I’m not for laissez faire, I’m for lots of competition, which means combating monopolies and encouraging everyone to do the best they can. Competition makes everyone better.
It is important to distinguish between wealth and income. A person can be very wealthy but have a small income and vice versa.
I am all in favor of steep inheritance taxes, but I also think that people who earn their money shouldn’t be demonized. Level the playing field and let the best man win, but don’t change the rules after the game because you didn’t like the outcome.
Right: “. . .the idea of passing wealth from generation to generation so that hundreds of your descendants can command the resources of other people simply because they came from the right womb flies in the face of a meritocratic society.”
So sayeth Warren Buffet. . .
Also from Buffet:
“The people who say, ‘I did it all myself,’ and think of themselves as Horatio Alger – believe me, they’d bid more to be in the United States than in Bangladesh. That’s the Ovarian Lottery.”
His explanation of the lottery goes something like this. Imagine that in the womb you could write down all the things you’d like your future life to be. But you’d have to put that slip of paper in in a drum with 6 billion other slips of paper and pick one out. That’s the Ovarian Lottery.
That lottery *should* demand an abundance of humility from each and every one of us. For those of us who preen and crow and claim “I did it all myself” there’s this:Imagine your life, if you had picked a different ticket. Imagine you were born in Bangladesh. To an alcoholic mother. Could you have made yourself smart all by yourself? Sure. If you weren’t born with certain types of brain-damage. If you had been blessed with the inherent drive, the diet, the education, the books, and other so-called “bootstraps”.
What Buffet is talking about should demand of us more than “bumper sticker” compassion. A saying like “Pull yourself up by your own bootstraps; I did it so you can, too ” (and such tripe) requires a huge uncompassionate assumption—that the person has bootstraps/ that he picked a ticket that gives him the bootstraps and the ability to pull on them.
magus71: “I’ve noticed this to be a major case for Libs: People only do well if they’re cheating, so make everyone equal and there’ll be no more cheating.”
I, a moderate liberal, don’t feel Warren Buffet cheated to get where he is. I wouldn’t want him to be “equal” either–in the sense, that is, that I think you might mean that word. I do agree with him, that inheritances should be heavily taxed, and that people of means, like him, owe somewhat of a debt to the great country that allowed them to achieve their success.
As for the idea that making everyone “equal” (in the same sense, or a different one?) will eliminate cheating–I imagine there are likely some conservatives and liberals think that simplistically about many different subjects, ranging from religion to political dogma and most everything in between. Damn humans.
Micheal: “Yes, some people bootstrap up and some don’t.” Add, please, “. . .and some can’t.”