Sunday, November 22, 2009

Is $200,000 a year an "excessive" income?

This question was asked by somebody on an online political forum; what follows was my reply to the inquirer:

Nobody is saying $200k is "excessive"-- depending on what you do to earn it. There are things I wouldn't do for $200k a year.

I think what you're getting at is whether people who make a lot of money should pay more taxes. That is a complicated issue. First, recognize that people who make, say, $200k a year pay the same rate as everyone else on the first $50, 100, 150k of taxable income. If a new higher tax bracket is placed at $200k, only that portion of his total income above $200k is taxed at the higher rate.

And recognize that people are generally only talking about income and estate taxes when they get themselves all worked up about the unfair taxation of the rich. In today's system, someone who makes $100k pays the same amount into Social Security as does that $200k guy. They both pay the same sales tax on a tube of tooth paste. They both pay the same amount of property tax per dollar of assessed valuation. And, to the extent that the rich guy's income derives from capital gains that he didn't work for, he will pay a lower rate than that $50k guy who had to actually go out and sweat for his bread. Warren Buffett summarized the situation nicely when he famously pointed out that his secretary pays a higher percentage of her income in taxes than he does.

Third, take note of the fact that the rich guy is likely to make more use of government services than the poor guy. Not only do the courts devote 90% of their resources to settling disputes among businesses, but the fire departments and police forces are primarily concerned with protecting the property of the rich. Even the streets in the rich part of town are likely to have fewer potholes than in the working-class neighborhoods so those Bentleys and Ferraris ride smoother and retain their resale value a bit better.

And lastly, recall that our gigantic military, on which we spend nearly as much as the rest of the world combined does on their collective armed forces, serves mostly to guarantee the free flow of oil from parts of the world that we have seriously annoyed with our political and military meddling. Money that could be much more wisely spent on building a green infrastructure at home instead goes to maintain and protect the flow of oil dollars into the coffers of America’s most profitable corporations--corporations that even now, in the midst of a worldwide recession, continue to chalk up record profits thanks to the generosity of American taxpayers.

All in all, it's hard to see how the rich are going to be hurt much, or even manage to argue they are being treated unfairly in any sense, if they are asked to come forward with a few more cents on the dollar so that some less-fortunate people can have adequate health care.

Wednesday, November 11, 2009

Veterans days always make me feel weird.

Veterans days always make me feel weird.

Especially when someone says "Thank you for your service." You see, I was an infantryman in Vietnam, but I did not serve willingly. I was drafted, forced into a deadly form of involuntary servitude, and whatever illusions I might originally have had about the rightness of the war were quickly torn from me when I saw what we were doing to the innocent people, the sacred soils, the beautiful waters and jungles and mountains of that tormented land.

"No, don't thank me," I want to say. "Forgive me. Forgive me for participating in that awful event in your name. If you must thank me for something, then thank me for joining the movement to stop the war when I got home. Maybe thank me for the things I have tried to do for the castoffs of society--the mentally ill, the developmentally disabled, the emotionally damaged products of chaotic and abusive homes who have gone on to fill our jails and prisons. But don't thank me for going off to participate in the destruction of a foreign land whose residents never intended any harm to you or me."