Anyone paying attention to any media outlets lately knows that the Bush Tax Cuts are coming to an end this year. Democrats want to continue taxing the rich ($200,000+ a year income) and give tax cuts to the lower rungs of the ladder. Republicans want to extend them for everyone. Actually, I imagine if they had their way, Republicans would lower taxes on the rich and raise them on the lower and middle classes. I don’t think they’ve said that, though.
My opinion on this is mixed. There’s “the rich” and then there’s the “filthy rich” with more money than god. $200,000 a year in income isn’t a whole lot in my mind. Not enough to get mad at them for. But, that’s what Democrats have done. And good for them for at least being able to articulate rage for once.
First, tax cuts aren’t handouts. They just mean the government doesn’t steal as much from me or someone else. Republicans by and large like tax cuts because they leave more money in people’s pockets as they earn them. Democrats want to tax people and then spend it on people with less of it. I have a problem with that moral idea.
The practical side of me thinks about the matter of wealth creation. How many people making $200,000 a year are suddenly going to try and make $199,999 a year? Tax brackets encourage people to skirt around the numbers, all in the name of keeping the money they earn. Plus, by and large, taxes discourage wealth creation. If I didn’t think I could make more money running my business, I never would have left my last salary job. If taxes prevent that belief or possibility, then wealth stagnates. When I start a business, I at least have the opportunity to make more money — maybe even $200,000 a year or more. Take that away and people just get content to sit around and earn beans.
Plus, most people aren’t stupid. And rich people have more than two brain cells AND money to fix things. Maryland created a “wealth tax” that taxed the super-rich with the expectation of making $106 million. Instead, they lost $257 million because the wealthy all got up and moved.
I don’t hate or feel angry at rich people — Sam Walton, Walt Disney, Steve Jobs, Bill Gates, these people spent a lot of time and effort to create something and I believe they ought to get rewarded for it. They happen to be immensely rewarded. Frankly, I’m fine with the idea that Sam Walton makes a lot of money vs. a guy in a trailer in Kentucky drinking beer and wondering why he doesn’t have any money. One guy worked harder, longer. The other sits in a trailer and drinks beer on weekends.
If you wanted to eliminate this problem, you’d institute a fair tax of 10% or some equally agreeable number and everyone would just pay that amount of their income.
People work to get money and a better life. They don’t work to pay taxes or pay for someone else’s quality of life (at least not in a recurring manner). I do have more of a problem with people who “come into wealth”, such as people who just happen to be born in the right place. I think people should work for their rewards, not inherit them — or at least not all of it. But I don’t have a problem with the wealthy. I hope to be one of them someday. Maybe I will, maybe I won’t. But just because I’m not right now doesn’t mean I should be angry and try to take their money.