Saturday, August 27, 2011

Redistribution of wealth

There are some who say (but I'm not sure they necessarily believe it) that taxes are a scheme to redistribute the nations wealth, taking from the (deserving) rich and giving to the (undeserving, bloodsucking) poor - kind of like Robin Hood on steroids. I do not subscribe to this theory.

First, taxes are, as has been frequently and famously said, what pay for our way of life. Quibble if you want with how high they should be or what programs we want to pay for with them, but there's just no avoiding the unpleasant truth that taxation is a necessary component of a free democratic society. To deny that truth or, worse, to portray them as something evil to be done away with at any cost is just plain ignorant and unpatriotic.

Second, there is a redistribution of wealth occurring in this country and is not due to taxes; it is the increasing concentration of wealth in the hands of the ultra-wealthy (can you say, "multi billionaire"?) I don't have the figures in front of me but they are readily available from any number of sources, and they are indisputable - American wealth by any measure is steadily flowing away from the poor and middle class and into the fortunes the economic top-tier. The thing about economic power is that once you have it, it gets easier and easier to use it in a way to amass even more wealth and power (it seems those terms are more and more synonymous in today's political climate) - "The rich get richer..." as it were.

I'm more worked up about this issue than usual due to two (kind of) unrelated articles I read in the business news today. The first headline that caught my attention was, "Luxury spending buoys Tiffany's to strong quarter". The article pointed out that Tiffany's stock surged 9.3% on the news while broader markets were up less than 2%. "Tiffany...has a customer base that leans heavily toward high-income consumers. Such shoppers tend to gravitate toward luxury goods." Now I'm not opposed to high-income earners buying luxury goods if they can afford them (apparently they can), but the second headline put the whole thing into a little different perspective for me.

"Economy grew only 1 percent in spring" is certainly not shocking or unexpected news in light of the difficulty it has been experiencing recently, but I found some of the details troubling in view Tiffany's success. First, that level of growth " not enough to make a noticeable dent in the unemployment rate. which was 9.1 percent in July." So those "no-income earners" who can't afford to shop anywhere will have no prospects for a brighter economic outlook in the near-term. "Consumers spent more on health care, insurance and financial services..." and, "People bought fewer long-lasting manufactured goods, such as autos and appliances." The bright spot cited in the article? - "Corporate profits rose faster than the previous quarter."

So, to recap: Luxury spending - up; corporate profits - up; consumer spending on health care - up; joblessness - also, up. So in light of this I would have to ask: Do you still think that taxes are the major villain causing the redistribution of wealth in this nation (and the world)? Really? Would it be such a bad thing to take just a little bit from the first two to improve the situation for the second two?

I'm not talking about "class warfare"; I'm talking about basic fairness. The system is rigged in favor of further concentrating wealth. We need to unrig it and I'm pretty sure taking a defiant, unyielding stand against any source of increased revenue is not helpful. "Taxes" are not the problem; "greed" is the problem.


  1. I agree 1000% with every word you wrote here. I wrote an op-ed for our local paper about this during Clinton's first campaign. Income inequality was was bad then, and while Clinton tried to put the skids to it, Dubya came along and dismantled all the good he did so that it's now escalated to the point that we're heading towards third-world country status as a land of Haves and Have-nots.

    The most troubling thing, as you point out, is that the more the balance shifts, the more intractable the problem becomes. I really fear that the only way we're going to derail this runaway train is by a revolution, but I just can't see most Americans engaging in one.

  2. @Deb - I agree that a "revolution" of sorts is what it will take to oust the greed and corruption that have infested the government (or the shadow forces that influence it) but I'm not holding my breath for it to happen. Part of the reason, I think, is that technology in the form of "smart-phones" and social media have become the new "opiate of the masses" - as long as we have our toys and can be self-absorbed in our use of them there is no chance of a revolution to bring about social and economic change. Which is ironic, since these same technologies are what enabled the uprisings that have led to change throughout the Arab world. Parallels with "1984" and "Brave New World" abound.