The ‘Fair Share’ Farce

It’s war on the wealthy.  And while I hope to some day soon parley my law degree into solvency, if not comfort, I can assure you that at this point in time I have far more in common with those protesting Wall Street than those being protested.

Well, insofar as my bank account and wallet is concerned, that is.  Rich or poor, I consider myself to be part of the “making” class, not part of the “taking” class.

As much as I thought that this upcoming election would be defined, on a macro level, by discussion of the proper size, scope and role of the federal government more so than by discussion of any smaller and more focused issue, the economic crisis has reached such a breaking point that we’re back to the days of “It’s The Economy, Stupid.”  Staring down the barrel of absolute disaster, and witnessing disaster in progress in Greece, Italy and other nations abroad, debate about the current state of the economy and what we will be facing in the future is a debate that Republicans should be winning. Unfortunately, the left in America continues to shape the discussion with the wide dissemination of alternate reality.

What gets me more than anything else, recently, is this notion of “fair share” and the extent to which the inflammatory rhetoric repeated by President Obama has tipped the scales for those on the left already disillusioned by the idea that people should keep what they earn.  More than 700 people were arrested in New York City following a protest at Wall Street and a march across the Brooklyn Bridge.  Dozens more were arrested in Boston after protesting Bank of America.  Other protests were seen across the country, from Chicago to Denver to Los Angeles to Seattle.  (As an aside, of the millions who have attended Tea Party rallies, how many arrests have there been?  Only one idiot that I know of, though I could be wrong.)

Dim-witted souls permeating pop culture are eating it up, adding fuel to a fire already burning from the kindling of disillusionment. Comedienne and all-around wonderful lady Roseanne Barr suggests that wealthy bankers who do not share their wealth be sent to “re-education camps” and then be beheaded.  Hip-hop mogul Russell Simmons–worth $340 million–called for the federal government to raise taxes on the wealthy.  And, to a certain extent, a segment of the younger population facing mounting student loan debt and uncertain job prospects are listening.  With our entitlement society serving as the dry grass and tinder woven throughout the fabric of our nation, that fire is ready to become a conflagration.

The notion of “fair share” is certain to become a recurring theme as we advance toward November 2012.  “Fair share” are two words that evoke the frustration of the have-nots.  “Fair share” are two words rooted in a political philosophy that is floundering due to economic realities — to paraphrase Margaret Thatcher, the redistributionists are simply running out of other people’s money to redistribute … the takers are outnumbering the makers.

At the heart of it all, though, the “fair share” argument is farcical one.  Take a look at the numbers from 2008, thanks to the National Taxpayers Union:

Right now, as I struggle to get my law career going and Joanna struggles to find a full-time nursing position, we fall in the top 50 percent of all taxpayers.  (Ooh, I feel special.)  What that means is that folks who make as much as we do or more are paying a whopping 97.3 percent of all income taxes paid.  The top ten percent of all taxpayers–those making more than $113,799–are paying close to 70 percent of all income taxes.  The top one percent are paying nearly 40 percent.  The bottom 50 percent, those making less than $33,048 and likely with the time on their hands to protest Wall Street, are paying less than three percent of the total personal income tax paid.

While liberals will be quick to point out that folks in the bottom half still pay other taxes, such as payroll taxes and excise taxes on gasoline, aviation, alcohol and cigarettes, other than the payroll taxes those other taxes are consumption-based taxes — paid by everyone.  Even acknowledging the other taxes paid by those in the bottom half of wage-earners, what about the table above is fair?

If 40 percent of the total federal personal income tax is not enough for the top one percent of wage-earners, how much is?  If paying less than three percent into the system is not fair enough for the bottom half, what is?

From this point on, when folks on the left drone on and on about “fair share,” our answer should be YES.  We are absolutely in favor of people paying their fair share — starting with the bottom 50 percent.  I’ve had enough of it. It’s time to fight farce with fact.

Facts fall on deaf ears, however, to a crowd not willing to listen.  If the professional left were concerned about numbers and facts, people like Cornel West (see right) would understand that we ARE putting money into Lyndon Johnson’s War on Poverty, so much money in fact that we may shatter our society because of it.

According to the Department of Health and Human Services, Medicaid spending reached $339 billion in 2008, and is projected to grow at 7.9 percent over the next decade, reaching a yearly cost of $674 billion by 2017.   In contrast, according the Congressional Budget Office, the total cost of the Iraq War between 2003-2010 was $709 billion.  And Medicaid is only one facet of the “War on Poverty.”

The entire “class warfare” argument is bunk.  All of it.   Despite what the president says, for example, Warren Buffett pays a lower tax rate than his secretary not because of loopholes enjoyed because of his wealth, but because the vast majority of his income comes from dividends and is therefore taxed as capital gains — which are taxed at a lower rate for everyone than the personal income tax paid by his secretary on her salary.  All that the “fair share” rhetoric is disingenuous, and designed to foment the exact type of disillusionment and insurrection as we saw this weekend in New York, Boston, Chicago, Denver, Los Angeles and Seattle.

And it’s only going to get worse.  It’s going to get worse as our own economic situation becomes more and more bleak as we face the inevitable double-dip recession.  (In reality, I don’t know that we ever recovered at all from the first one.)  It’s going to get worse as the holidays near and people realize that they simply don’t have enough to go around.  And it’s going to get worse as we near the election and the rhetoric from the president and his proxies reach a fever pitch.

The questions, however, remain.  How much is enough?  How much more can the taking class take?  How much more can the productive class give?  And, frankly, what kind of outrage will we be facing when we’re forced to dial back entitlement programs down the road because we were unable or unwilling to make difficult decisions now?

Despite making the arguments I make, my own financial situation is not so different than the financial situations that cause so much frustration among the protesters.  I owe more in student loans than most Americans owe on their houses.  On Saturday, we chose between paying the rent and going food shopping.  On Sunday, we dug into the change bowl in order to afford formula for our six-month-old.  Tucking my five-year-old daughter into bed Sunday night, I noticed that she has more cash in her pink glass piggy bank than Joanna and I have in our savings account.

I will not pretend to be wealthy.  But that doesn’t mean I cannot be wise.  I urge you to be the same

 

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Comments

  1. JohnBoy says:

    The math is amazing when you think about it. Too bad liberals don’t think.

  2. Gail B. says:

    Liberals are proof of a failed education system!

  3. whats_up says:

    I think some of the frustration lies in the fact that those on Wall Street who made poor choices are rarely held accountable, either criminally or civilly (sp). Perhaps if we saw more of that, many in the middle class wouldnt be so frustrated. I do think we should tax dividends at the same rate as other income, and we should do away with most loopholes both corporate and personal. Also we need a fundamental change in our mindset. Greed seems to be the driving force behind many things. Seriously when banks begin to charge a fee to access my own money (which they are using to make money off of) I have a problem with that.

  4. Boston Blackie says:

    When Warren Buffet stops fighting a billion dollar tax bill for his Hathaway company, when G.E. STARTS paying taxes, when Rosanne, Cornel, Susan Sarandon, John Stewart and all the other limo liberals screaming the loudest show us their tax returns so we can review the deductions, then and only then will I give them the time of day. Funny how Obeyme took any and all deductions he was entitled to, so how about he redistribute his own wealth. I love how the protesters in Boston today marched to the local Fox affiliate about a mile from where they were camping out even though the local NBC affiliate was only ONE block away. To them, Fox is the big bad wolf in bed with Wall St yet if they did their homework they would find out how much $$$ is being funneled to Obeyme’s campaign(and from whom).
    Even Robert Johnson, founder and CEO of BET, has spoken out against Obeyme’s class warfare. He said that he earned his wealth, he has the right to fly private if he desires. I’m sure (hopefully) after January 2013, Obeyme and Moochelle won’t be flying commercial any time soon.
    I agree with you when you say we have more in common with the protesters. The only difference is they expect Uncle Sugar to play nursemaid from crib to coffin. You and I and most Americans are struggling to make ends meet until things get better for us.

  5. Jeff Schreiber says:

    What’s up,

    As usual, a cogent argument from you. The one thing I would add is that the recent bank fee you speak of is a direct consequence of the Dodd-Frank bill. I have asked a friend of mine who does commercial banking for a living to weigh in here at AR. He guards his privacy very, very much, but given the discussions that he and I have had, he is the perfect one to talk about the burdens placed upon an already burdened industry and populace by Dodd-Frank.

    Thanks, as always, for speaking your mind.

    Jeff

  6. whats_up says:

    Jeff I would love to hear your friends viewpoint. Also though I think it important to understand how higher swipe fees hurt small business the most and ultimately the consumer as they were passed on to us in the majority of cases.

  7. whats_up says:

    @Gail,

    Do you have something to support that the education system is failing, other than to blame it all on liberals. To a more important point, why do you do that, blame everything on liberals, you cant seriously believe that liberals are the sole reason that we are in the mess?

  8. Jeff Schreiber says:

    So would I, What’s up. I hope he comes through, but the time commitment is a lot to ask of folks, especially if putting together a piece of writing for public consumption doesn’t come easily. That’s why I’ve been lucky to find folks like those who post here often, and that’s why so many contributors who post once or twice go months without doing more, or simply don’t come back — I can’t ask them to put time in … they’ve got to do so for themselves.

  9. Jordan Bell says:

    “I do think we should tax dividends at the same rate as other income, and we should do away with most loopholes both corporate and personal.”

    Personally, I would prefer that they don’t take anymore of my money that I work for and invest. They should eliminate the income tax, corporate tax, payroll tax, not tax any dividends, and increase the number of loopholes so I can keep more of what I work for. I could then take more of that money and reinvest it to help those business ventures grow and put more people to work.

    We should be looking at starving the government, not finding ways to increase its stranglehold. You have to remember, our government functioned primarily off tariffs alone from the founding till the income tax passed in 1913.

    “We have tried spending money. We are spending more than we have ever spent before and it does not work.” That is from Henry Morgantheau, Secretary of the Treasury under Roosevelt. And we see what happened during that time.

  10. Anonymous says:

    @ what’s up;

    If you don’t like the fee, bank someplace else. Have you considered the margins banks now operate with interest rates at their current sustained level?

    It’s quite confusing that you are so upset at the fee collected, and yet have no problem with taking a fee off a dividend of monies I have risked for said dividend?

    I couldn’t agree with you more, the greatest economic tragedy in tax law lies in interest deduction allowance.

    (ps. if money isn’t earning 4% (what bank (or dividend, for the most part) is paying that) you are historically losing value, at an alarming compounded rate)

  11. Gail B. says:

    Jeff, my email is not up. Ck aa21.blog.com. It’s very revealing and very shocking.

  12. bobupton says:

    “But with respect to future debt; would it not be wise and just for that nation to declare in the constitution they are forming that neither the legislature, nor the nation itself can validly contract more debt, than they may pay within their own age, or within the term of 19 years.” Thomas Jefferson

    “If we can prevent the government from wasting the labors of the people, under the pretense of taking care of them, they must become happy.” Thomas Jefferson

    “I think we have more machinery of government than is necessary, too many parasites living on the labor of the industrious.” Thomas Jefferson

    The multiplication of public offices, increase of expense beyond income, growth and entailment of a public debt, are indications soliciting the employment of the pruning knife. Thomas Jefferson

    Where are the men of vision and logic today?

  13. Just when I am lost in the crazy talk of the political heads in DC, it’s so nice to come and read The Voice of Reason here at AR. I add my big AMEN to this. I am so tired of this class warfare. Who is the govt to decide what’s fair? They can’t seem to take the blinders off to even notice that the top 1, 5, 10, 25% are paying their “fair” share. It would be prudent to reexamine the Laffer Curve and the fact that when we reach a point where the overtaxed feel just that: overtaxed. They decide it’s not worth creating more wealth….and don’t.

    We should also point out to the likes of Cornel West that while the taxpayers have forked over trillions upon trillions of dollars on this so-called war on poverty over the last several decades, the overall poverty level in this country has only improved 2-3%. By my calculations, that’s a terrible investment.

  14. whats_up says:

    @ Jordan,

    Well it is no longer 1913 and there are increased costs associated with bigger population, more roads for that new invention the car, more bridges that need to be built and maintained. Not to mention the fact that as a society we decided that the elderly need to be able to live in dignity and not in the poor house as they grew older. It costs a little more to maintain our military now then it did in 1913, considering we now have some new inventions, the Airplane (actually jets now) as well as helicopters. We have a two ocean Navy as well, something that we didnt have in 1913. I hate to tell you but it is not longer 1913 and American has changed, you may not think for the better, but I disagree.

  15. whats_up says:

    @ Anon,

    Again we need to change our mindset a little. Greed rules most corporations now. Exactly how much profit do banks need to make?

  16. Anonymous says:

    @ whats up

    Ok, I’ll change my mindset, as you didn’t answer the question (I hate that tactic)

    How much profit does the Government need to make (off of my successes)?

    Personally, the greed exhibited by the Government and it’s institutions pales in comparison to any corporate windfall. Please remember, companies can’t make money where there is no money to be made in the first place. If there were no benefit of high return, who’d risk it?

  17. Randy Wills says:

    First, I’m happy as a clam to see Jeff’s always-excellent writings stir up a little back-and-forth commentary by AR vistiors who actually care about solving problems and reaching agreement rather than simply exchanging vitriolic (and always overly-broad) zingers at each other.

    Secondly, it is interesting to me that we’re still stuck on the concept that the govenment has the ability to rectify the problems inherent in combining democracy and human nature. We can talk about subjective fairness of taxation all we want, but the fact of the matter is that it is the voters, by their ever-increasing expectations for government intervention in all facets of life, who make a positive outcome impossible.

    If the citizeny of a nation were to be serious about improving conditions across the full spectrum of the human activity, then they must understand that the corporate failings of human nature can only be solved at the individual level. The first step – the one that a majority of the population rejects – is to get the federal government out of the business of trying to rectify the fundemental problems of human nature – i.e. “the lust of the flesh” (sexual greed), “the lust of the eyes” (material greed), and “the power of life” (control over others) – in all of its manifestations. There is no amount of taxpayer dollars or government regulation which will bring those issues under control.

    However, the one outcome that the present course that we are on can guarantee is more and more intrusive control, higher and higher taxation, and, if allowed to reach its natural conclusion, a Marxist/Socialist form of government. There simply is no other reasonable expectation. World history confirms that “we’ve been there, done that” and the results weren’t pretty.

    Randy

  18. Randy Wills says:

    P.S. Excuse the usual typos/misspellings. It’s just my age and failing eyesight, I’m sure. Carelessness? Never.

    Randy

  19. Jordan Bell says:

    Whats_up,

    You are right. It is no longer 1913. With all that money that government has been stealing from us and printing up out of thin air since then, they have used it to expand the welfare/warfare state and to empire build. Soon the value of the dollar will collapse and it will come to end. No paper money has ever lasted.

    I would like to understand what makes you think that without government care the elderly would have no dignity and be put in the poor house? Are you that incompassionate yourself that you would force your parents/grandparents onto someone else to take care of them? Cause that is exactly what you are implying. I don’t need a government mandate to do the right thing, but apparently you do. That is unfortunate.

    Technology wise America has improved for the better, and has improved the lives, wealth, and standard of living of everyone than we have ever known before. But it sure didn’t come from the government. It came from individuals who wanted to have a better life for themselves, and in turn traded their skills and discoveries with others to further improve their lives.

  20. Dee says:

    Why is it greed to want to keep the money that I earn? I am more than willing to share but I want to choose who to share it with. I don’t want to be told what to do with my money and I don’t want to give it to those who have no intention of doing for themselves. Eventually, the government will run out of everyone else’s money. I don’t see any of the people who continue to rant about the “rich” and are rich themselves(i.e. Hollywood, Michael Moore, BO, many other politicians, Al Gore, etc, etc), giving up their luxeries and cash. When they start “putting skin in the game” maybe then I’ll consider it.

  21. whats_up says:

    @ Jordan Bell,

    “I would like to understand what makes you think that without government care the elderly would have no dignity and be put in the poor house? Are you that incompassionate yourself that you would force your parents/grandparents onto someone else to take care of them? Cause that is exactly what you are implying. I don’t need a government mandate to do the right thing, but apparently you do. That is unfortunate.”

    Jordan, you ask a good question. However you imply things to me which are in error. I never stated that I needed a mandate to take care of the elderly in my family, lucky for me I am in a position that I would be able to. However all we need to do is go back to the 1930′s before the advent of Social Security to see what would occur, remember history can teach us many things. Many of the elderly could not be taken care by family, or if so it put such a burden on families that they were not able to send their children to college, or to adequetaly provide for their children.

    I also notice you didnt address in any manner the responsibilities of government to provide for the infrastructure needs of this country. Nor do you address the need to maintain the military or police forces.

  22. whats_up says:

    @ Anon,

    Pardon if I didnt answer your question, but you only asked me one which had to do with profit margins on banks, and I addressed that question. Again how much profit do we need to make to be considered succesful. Dont get me wrong, I am not against making a profit, I am against making the never ending have to grow the company at 5% a quarter or we are no longer considered succesful company. Many of the abuses of Wall Street and the banking sector can be laid at the foot of this concept. Perhaps we should re-evaluate what we consider successful. Are you a moral company, in that you dont try to skirt the rules or brush things under the table. Do you provide security for your workers by not placing them in danger or you have taken resonable precautions for their safety. Do you pay your takes and not try and skate on what you owe. We all have a duty to pay for the things that society uses. Roads, utilities, fire dept, police dept, hospitals, things of this nature.

  23. whats_up says:

    @Dee,

    Wouldnt that be nice if I could decide where I wanted my tax money spent. You know not supporting certain wars that I disagreed with or individual govt programs. Also do you belive that all those on welfare and or unemployment are lazy and simply out to get something for nothing? That sure is what it sounds like you are saying so forgive me if I got it wrong. I would agree if that was the case, however I dont think that the majority of those folks like being where they are. I am not against social safety nets as they benefit all of us. Have you thought of the consequences if they werent there. Look back at history and tell me if that is how you want are society to be or not.

  24. whats_up says:

    @ Jordan,

    “Technology wise America has improved for the better, and has improved the lives, wealth, and standard of living of everyone than we have ever known before. But it sure didn’t come from the government. It came from individuals who wanted to have a better life for themselves, and in turn traded their skills and discoveries with others to further improve their lives”

    Jordan I think you gloss over the positives that the govt has done in making it easier for those in the private sector to improve the lives, wealth and standard of living for everyone. Dont forget it was the govt that created the interstate highway system that connects the whole country and makes it easier and faster to haul items that are grown or produced. Dont forget the internet was created by the military, an arm of the govt. Many advances in technology were first created by the military. The jet for example, penecilin in treating wounds. Dont discount the value the govt has in make these things possible.

  25. Randy Wills says:

    To “Dee” @ 7:57 PM:

    Good comment, Dee. I don’t believe that it is “greed” to want to control your own income, regardless of how much it is. The usual rantings against the “rich” are simply another form of “sin”, which is “envy”.

    I call it “greed” when a person has access to far more resources than they need to lead a decent life and yet ignores the needs of their “neighbors” who are UNABLE – not UNWILLING – through no fault of their own to care for their themselves and their families. I am a unrepentant free market capitalist, but I cringe when I peruse the real estate section of the weekend WSJ and observe the obscenely ostentatious estates that the truly rich trade in. I call that unmitigated greed, for which I have the greatest distain.

    The criteria that we use to manage our personal resources is “Purposeful Adequacy”. The rest we give away. As for our business, we manage it to make as much profit as we can, which is then distributed to our shareholders who are able to make their own decisions as to how they would use it.

    Randy

  26. Dee says:

    whats_up, I was not talking about my tax dollars. Heavens, I wish I did not have to contribute to some of the programs and projects that government has, in my opinion, wasted my tax dollars on. I was speaking of the money that I bring home from my paycheck. No I do not believe that all of those on welfare or unemployment want to be there. However, in my job I have seen many abuse the system and therefore my outlook maybe skewed. I decided a long time ago that there will always be those who have more than I do and those who have less. When possible we have given to those who have less but it was our choice. We did not have to do anything. The only thing I hear BO talking about are roads, bridges, and schools. Not all of those on welfare or unemployment are eligible for any of those jobs. Do those occupations spend money wisely? Will more money really help them do a better job? As always, nice to talk to you.

  27. Anonymous says:

    “Are you a moral company, in that you dont try to skirt the rules or brush things under the table.”

    I hope you have the same disdain for those in the entertainment (especially sports) industry.

    Ethics, and the perception thereof, has lost any value in today’s society.

  28. John Buyon says:

    Jeff, I don’t get it.

    -You are being screwed by the Mortgage companies that speculated on property prices, created a bubble, swindled millions of Americans out of their life savings and bankrupted the retail banks THEN promptly lobbied for a bailout which they spent on bonuses for themselves all while home prices were decreasing leaving people like you stuck in underwater mortgages.
    -You are being screwed by banks and lending institutions that viciously exploit students for student loans that they could never realistically pay back
    -You are being screwed by corporate america that strives to lower wages for the low skilled, blue collar workers and for young professionals like you

    For heavens sake your baby daughter has more money in her piggy bank than you have in your savings account

    Yet despite all this you and other marginalized hard working conservatives get up and channel your hatred on a center-left president and moderate republicans and democrats that want to give you health care and economic relief….

    I don’t get it?
    What is wrong with you?
    Have you heard about the book whats wrong with Kansas?

  29. Jeff Schreiber says:

    John,

    I don’t WANT any politician to GIVE me health care and economic relief. I want government to do what it’s supposed to do — create an environment in which those things are provided to everyone organically, through private sector growth and prosperity.

    With all due respect, it is your government-as-panacea philosophy that I don’t get, John.

    Jeff

  30. John Buyon says:

    Jeff, keep allowing the rich and powerful to get richer and more powerful…

    I’m sure all the little people would be fine with that, Im sure they wouldn’t take to the streets, I’m sure they wouldn’t strike, Im sure they wouldn’t resort to crime…

    see this is where the beauty of social democracy comes in

    The better off the poor/ working class is the less likely that they are to impede the prosperity of the rich and wealthy.

    so yea sure take away the houses, jobs, pensions, educations, futures of the 99% and behold the prosperous society that would create.

  31. rose says:

    do many here believe the people who run government are more righteous and moral than everyone else? because that is what is implied when people want more government to intervene in people’s lives to make it more fair to save the whales or save the air we breath or whatever.

    people in corporations are not more moral either. no man can rule over other men, it is impossible. we cant rule over ourselves let alone others. that is why governments and corporations fail (at making it a just and fair world)the more we learn about human nature, the enviroment such as ecology or pollution managment or economics or whatever the more we realize that we just don’t know enough to be able to solve the problems of enviroment, poverty, wars income inequality. our scope of knowledge is so limited that we could say we are all just infants in comparsion to even the least of the angels in heaven. infants don’t rule over anyone.

    and the second obstable is getting humans to agree on what to do and to have a common purpose or goal they can all agree on to work towards. why do you suppose religions is such a mess? no mass agreement on what truth is. what is right and wrong, no agreement. to many people have their own ideas on how things should be done and what goals should be paramount and how that can be achieved. this applies to business and politics too.

    for example most want an end to wars but there is no consences on how to achieve that so it never gets done. many do not understand why this is so hard to achieve. even nations cannot agree on what policies they should all follow equally.

    then there is the human factor. I will call it sin, that inborn tendency to be selfish, greedy, arrogant, envious, there is a reason that power attracts the rats of the world. it attracts noble minded ones to but these find themselves overwhelmed by the rats and they end up swimming against the tide getting no where.

    so man will never solve these problems he doesn’t have the ability. if you can get rid of sin, death and satan you could but none can. sorry to be a bearer of bad news. it is not all bad however.

    rose

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