Interesting column today by Paul Krugman, the Nobel Prize winning economist at the NYTimes who argues that the rich today seem to be more than a little grumpy.
This is really nothing new … there have been jokes, based on reality, for decades about the rich avoiding paying taxes through trusts, off-shore accounts and so on. But Krugman says something I’ve always wondered about myself: That the staunchest defenders of the rich’s ability to avoid taxes, or to not have their taxes raised more than taxes on us schmoes, are among the poorest in the nation. In a way this is arguing against their own self-interest since taxing the rich more would ease their own tax burden. Higher tax rates on the rich might make higher education more affordable, just on example — instead of having to go into debt to the rich for the rest of your life to pay for college.
A progressive tax has been part of the nation for almost as long as the nation has been around. When the nation was founded wealthy landowners paid property tax, while poor renters didn’t pay anything, since they didn’t own land. And when the property tax was instituted it hit the rich the hardest, the thinking being that they benefit more, in proportion, from the nation than the poor do.
Not to mention, they can afford it better. The poor pay all they earn to stay alive, the rich have a lot more surplus income.
Yeah yeah, I hear you: Taking a person’s money based on the need of others is socialism. But we’ve been taking each other’s money for the benefit of all for hundreds of thousands of years. We settled that argument when we decided to have governments. All we’re debating now is the details.
We have a real-time example of this in Gov. Gary Herbert’s problems with campaign donations. He is being accused of possibly granting favors in the form of highway projects in exchange for campaign donations.
I highly doubt that he is, but the bruhaha again illustrates what I’ve been saying for years: The doners don’t need to buy Gary’s favors, they already have them. The donations are to make sure he stays in office. He’s the choice of the monied crowd, and they’re happy to wield their money to make sure he stays the choice of everyone. Herbert wants to be liked by the rich, so he’ll keep doing what he’s doing and if that happens to coincide with the desires of a lot of construction companies, well, what a coincidence!
Top of Utah had a real nice example of that in the $16 million in federal funds that Sen. Bob Bennett sponsored to build the Trappers Loop Connector Road for Earl Holding. Holding didn’t need the feds to build his road — he could have financed it out of his pocket change. But Sen. Bob got it for him anyway — not in exchange for campaign donations or political favors, but simply because they’re both rich guys, members of the rich guy club, conversant in the secret signs and symbols of same (or should that be $ymbol$?). Rich guys take care of each other.
An after-thought: I hear that we should not tax the rich at a higher rate because the poor dears are the most productive people in society and why should we punish them for being productive? But ask yourself: Does a corporate director who earns 400 times what one of his line workers makes really produce for society 400 times what that guy on the line does? Are his services really so indispensable? His output really so massive? Is that guy really doing a 10-times better job of running his company than the guy who ran it 40 years ago when the boss only made 40 times what a line worker does?