Taxing “the rich”

Sometimes I just shake my head when I hear politicians say they’re going to tax “the rich” more.  There’s a couple of problems I see that this philosophy can lead to:

1.  How do you know when you’ve taxed “the rich” enough: when they aren’t “rich” anymore?

2.  What exactly is “rich”?  I think it is somewhat telling that in the Saddleback Forums Senator Obama defined rich as over $250,000, while Senator McCain referred to rich as over $5 million.  There’s plenty of dual-income families out there who make over $250,000 on paper but are far from “living on easy street” because costs of living in metro areas, costs of raising children, costs of education, trying to save for retirement, trying to save for a rainy day, and other factors quickly pare that away.

3.  I thought part of the American dream was that if you worked hard you could become wealthy–why do we keep taxing that dream and treating it like it’s bad?  Every dollar of increased taxes on “the rich”, decreases the incentive to work hard to get there.  When you know 42% of every dollar you make for “going the extra mile” is going to the government in income taxes, at some point you can question whether it’s worth it.

4.  The less money “the rich” have, the less money they can spend into the economy supporting other wage earners.  I guess you can say the government spends it for them, but that begins to counter American principles at a certain level.

I’m not saying that the single mother with three kids should be treated proportionally the same as Warren Buffet, but this philosophy that “that group of people over there has lots of money and can do without some more of it” eventually backfires if not taken in perspective.

For a sense of that perspective, consider this: the top 5% of taxpayers make up 36% of income reported, and pay 60% of the taxes collected.  That’s just the top 5%–they pay 60% of taxes collected.  And the top quarter of all earners?  They pay 86% of taxes collected. (Source)

Another interesting fact: in 1920, all taxes paid by an individual comprised 12% of their income (this includes income tax, sales tax, property tax, etc.).  In 2007, 31.7% of your income went to taxes.  That means you were working until the end of April for government, and started working for yourself in May. (Source)

Again, I’m not saying that those who are making larger sums of money should be treated the same by our tax system as somebody earning minimum wage, but I do think we need to ask ourselves what the appropriate balance is, rather than just saying every election cycle that it’s time to increase the taxes on the wealthy again because we want to use their money to new government ends.  Remember, the income tax, which was introduced by the 16th amendment in 1909, was originally to affect the wealthy.  The problem is, once you allow someone else to be affected, you become next in line.

Impressions from the First Presidential Debate

Not to any great surprise, Senator John McCain was more in his element with the discussion of tonight’s debate centered on foreign affairs. He demonstrated a deeper knowledge of the issues, the players, and the international political landscape, as well as specifics on what steps need to be taken. Although Senator Barack Obama showed he was conversant on the issues, to me he lacked in the specifics, which is a theme I’ve been noticing from his campaign in general. He cites all the facts on what things have gone wrong in the last eight years, but his plans for the future are fairly generic in nature, and some even boil down to “I’ll make things better”. Such as, ‘when I’m President, we’ll be energy independent in ten years’. I find much, but not all, of his vision for America good, just lacking in particulars. For example, when the moderator asked what steps each might take in January given the economic troubles bubbling over, Senator McCain said he’d consider a spending freeze except in critical areas, while Senator Obama just talked generalities about how unspecified components of his energy plan might have to be delayed. And while Senator McCain talked about the realities of international negotiations, cultures (e.g., the intermarrying of al Qaeda in the northern parts of Pakistan), and the historical perspectives on Russia’s recent actions, Senator Obama appealed to more general notions of being open to talks with dictators and being sure the USA is perceived positively by other nations.

So that was my main impression: That while Senator Barack Obama demonstrated his knowledge and philosophical approach, Senator John McCain showed a greater mastery of foreign affairs and elucidated specific policies.

My quote of the night: Responding to Senator Obama’s assertion that this isn’t the time to stare into foreign leader’s eyes and read their souls, Senator McCain said ‘I’ve looked into the eyes of Vladimir Putin and seen three letters: K-G-B.’

Things social, political, & cultural

Greetings!  The public square is where we meet to converse, persuade, and make decisions about our life in common.  This blog is my contribution to that square, including thoughts, commentary, and observations about things social, political, and cultural.  Although I’m sure there will be some disagreements, may it not distract us from our ceaseless pursuit of the true, the good, and the beautiful, so that it may be reflected more and more in our shared life together. (Or as G. K. Chesterton said, “Never let a quarrel get in the way of a good argument.”)

A note about comments: with the average number of hours in a day forecasted to hold steady, I don’t forsee being able to spend adequate time monitoring comments, and everything that goes with it.  As a result, I’m expecting here at the outset to leave them off mostly, and possibly open certain posts up from time to time as the schedule permits.  Of course, there’s always e-mail and trackbacks, though I cannot promise to respond in all cases.

So let the posting begin!

EDIT:  I should mention that in regards to regularity of posts, occasional rather than frequent will be the rule.