Tuesday, August 14, 2012

Repost: Why redistribution of wealth is A Good Thing

Author note:  This was originally posted in October of 2008, though I think it's still plenty relevant.  I'm reposting it now with some minor edits, because I have Things To Do In Real Life sometimes. I may or may not use this for a jumping-off point for something newer, eventually.

I have an hour before my next class, so I figured I'd write a bit about this FoxNews thing I was reading about Obama's plan to distribute America's wealth a little more evenly.

There's this whole discussion about even distribution of wealth not being a part of the American Dream. That it's kind of like a Robin Hood scheme: in the words of the Fox host, "giving a little bit from the rich to the poor".

One thing that people think will happen under this kind of "re"distribution is that companies will move overseas.

A brief reminder about the uneven distribution of wealth in America:
According to Business Week, the ratio of CEO pay to factory worker pay at the biggest 365 U.S. companies was 326 to 1 in 1997, up from 44 to 1 in 1965. In Japan in 1995, the equivalent ratio was 16 to 1, and in Germany, 21 to 1.
Apparently there are no corporations to be found in either Germany or Japan, since these CEOs were getting robbed! Robbed I say! of their hard-earned wealth!  I'm sure they all jumped ship and came to America, where CEOs get their rightful share!

Oh wait... maybe not.

The idea behind Obama's tax schema is this: right now, a very small percentage of people are allotted a very large amount of the nation's wealth, because of the hideously unfair US pay scale. CEOs and people near the top of the company are making ludicrous sums; workers and lower-tier employees are having a hard time with the necessities like rent/mortgage payments, food, and healthcare.

I think that a big part of the American dream is fair compensation for your work. If you are working a full-time job, you are contributing "your share" to the economy, and should be able to afford things like basic food, housing, and healthcare... and even an occasional luxury, like a PS2 or a night out with your wife or a six-pack of beer on a Saturday night.  I'd say that a full-time worker - anywhere in the US - should be able to maintain a basic quality of life. (And two full-time workers - anywhere in the US - should be able to maintain a basic quality of life for their family.) This is the whole idea behind that whole union thing that went down in our country during the Industrial Revolution, and we seemed to think it was a good idea then. As a Pittsburgh native, I do remember some of the local history that was taught around them parts.

Seeing as that ideal - of a full time worker being capable of maintaining a basic quality of life - is not exactly working out on its own, we as a society need to fix something.

A more heavily graduated tax plan is one part of this solution. Basically, this means that you tax the rich at a higher percentage than you do the poor.

What's the rationale for all this, you ask?

From a strictly capitalistic, "you pay for what you use" perspective:

The more money someone makes, the more they tend to use the infrastructure of society. If I'm an international banker, my income depends on all of the infrastructure that me and my banks and my employees use - from all the markets that my bank is a part of, to the airplanes I use to travel overseas, to the roads of each city my banks are built in, the public transportation that my employees use to get to work, and much more. If I'm just a bank teller, my income generally depends only on the local infrastructure - the buses and roads that get me from home to work and back, the schools my kids go to, etc. So, since the wealthier people use more of society's resources, they should be more responsible for maintaining those resources than the lower-paid workers, who use much less.

In addition, a small amount of the vast resources at the top will go a lot farther in improving said infrastructure, which benefits those who use it the most (the wealthy).

Plus, if workers have even a small amount of additional resources, they will be happier and healthier and thus more productive.

The following reasons could possibly be labeled "socialist" by Fox-News-ians, so feel free to disregard if you must:

The wealthy are better able to cope with a heavier tax burden (duh). If I'm making a million bucks a year, a 20% tax burden will still leave me with 800K. That's plenty of money. If I'm making $40,000 (which is close to the median family income in the US), a 20% tax burden will leave me with $32,000. Food, transport, utilities, and rent will take up more than half of this in most parts of the country. Add in clothing, car maintenance, regular doctor and dentist appointments, holiday expenditures, and some basic sanity-saving "luxuries" like a phone, internet connection, and cable, and you've taken up all the rest, if not more. Kids? Health problems? Fuggeddaboutit.

Oh, and to quote my bud Tim, "The needs of the many outweigh the wants of the few."

But that's just socialist propagamda, eh?

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