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America, get realistic and tax the rich
Felix Salmon, blogger for Portfolio.com
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TEXT OF COMMENTARY
Felix Salmon: In England, if you are born rich and privileged, you'll probably stay that way forever. And if you are born poor, you'll probably stay that way, too.
Tess Vigeland: Commentator and Reuters blogger Felix Salmon.
Salmon: Americans, by contrast, believe in the American Dream, the idea that anybody can become rich or become president. The two countries' income taxes reflect the differences: the U.K. has a progressive income tax which reaches 50 percent on incomes more than 150,000 pounds, which is roughly the same as $250,000. In the U.S., by contrast, the federal income tax is always less than 40 percent no matter how much money you make.
Part of the reason is tied up in American aspirations, which were tweaked in a recent New Yorker cartoon. Two guys are in a bar, the first says to the second: "As a potential lottery winner, I totally support tax cuts for the wealthy."
Potential wealth. That's why Americans don't like high taxes on the rich, and that's the difference between the U.S. and the U.K.
The U.S. is a fundamentally aspirational society, where financiers like Donald Trump have an enormous and genuine popular following, mostly just because they're rich. Yes, we have wealthy families and celebrities and entrepreneurs and real estate moguls in the U.K. But Brits tend to react to seven-figure incomes with disgust rather than with awe or respect. And they're not under any delusion that they will be wealthy one day.
And in that respect, the Brits are much more realistic than Americans. For all that the American Dream is woven into this country's culture, there's actually less social mobility here than in most of Europe. If you're born poor, you're much more likely to make it rich in a country like Sweden or even Canada than you are in the U.S.
Countries that provide good resources for poorer families and have cheap or free university education are much more likely than America to see people working their way up the ladder. Americans oppose tax cuts because they think that even if they're not rich today, they might be tomorrow. But they're wrong about that. The American Dream is just a dream -- it is not based on reality.
First off: I totally agree that the U.S. has a responsibility to it's citizens to provide higher quality k-12 education than we do. I see this as the great threat to the stability of our country.
That said, I think the study cited is misleading. I'm sure that if you're born poor you're unlikely to become a billionaire, but how likely are you to make it into the middle class? The upper middle class? That to me is more important than becoming uber rich. For people in Europe, the distance between the top quintile and the bottom quintile might not be so far, so the number of rungs not so great to climb. Before you say that sounds great, I have some relatives who are lower class in Germany. They live on social assistance and have a lot less than the poor in the U.S. (but presumably better schools).
Also, the study cited by the author has been refuted by other studies. For example this one: http://www.urban.org/publications/406722.html
Not saying we should or should not tax the rich more, although I think as another NPR guest said, taxing a dentist who makes $250k at the same rate as a person pulling in $1 Mil is a bit ridiculous.
Also -- taxing anyone who votes NOTHING seems dangerous.
"The GOVERNMENT is the #1 threat to democracy, capitalism, and your economic survival. No more tax increases. It's time to start eliminating GOVERNMENT agencies and terminating GOVERNMENT employees"
By golly a fellow TARHEEL has identified the problem and the solution. Regardless of the taxes levied and received, the Federal Government, at the behest of Congress and the Executive branch,regardless of the political party in power, will create new programs and entitlements that will require additional funds raised by taxing those who do the work!
I totally agree with the author of this article. At times it feels like everyone has been drinking the Kool-aid. The Brits appear to have a bit more cultural maturity than we Americans with our worship of money. We should be asking why they view the rich differently, instead of insisting that we are the ones who see the world correctly. We have been acting like adolescents impressed with our new found physical strength and forgetting that our elders (cultures and societies that have been around much longer) might know more than we do about some things.
The problem is not that we don't pay enough taxes. The problem is that GOVERNMENT is too big. Add up all government taxation ... federal, state, city, county, and local. The GOVERNMENT takes about 50%. The GOVERNMENT is a genius at hiding taxes. They take it off the top before you get your paycheck so you won't notice how much they are stealing. About 40% of the cost of a tank of gas is tax. Check your phone and power bills ... that "fee" is a tax collect by the utilities and passed along to the GOVERNMENT. The list goes on for miles ... and on top of that, the FEDERAL GOVERNMENT still runs TRILLION dollar deficits. The GOVERNMENT is the #1 threat to democracy, capitalism, and your economic survival. No more tax increases. It's time to start eliminating GOVERNMENT agencies and terminating GOVERNMENT employees.
Meredith Parry seems to miss the point of being American entirely. In a Republic, which takes as its absolute virtue the RIGHT (originally meaning "obligation") of being a citizen, and that the "common good" is preeminent in such a political system, is simply NOT comprehensible. I am saddened to think that we as Americans need the English to remind us of this essential fact. The most common feature of Americans is that they believe in the American Dream because they have never taken the time to seriously analyze what it means. My Christmas gift to Meredith, a Reading List:
From Equivalence to Equity: The Management of an American Myth, by AMANDA EMERSON ( Differences 14 no2 78-105 Summer 2003 )
Locke, John. An Essay on Human Understanding. 1690. London: Penguin, 1997.
Locke, John. Second Treatise on Government. Ed. Richard Cox. Arlington Heights: Harlan Davidson, 1982.
Montesquieu, Charles de Secondat, baron de. The Spirit of the Laws. 1748. Trans. and ed. Anne M. Cohler et al. New York: Cambridge UP, 1989.
She will, of course, NOT read them, because it is SO much easier to believe in the myth than it is to debunk it, to understand it, and, most challenging, to make it a reality. It requires far too much mental investment to confront ones own blind faith in a dream that does not exist than it is to dissect the myth and come to some deeper understanding of what it takes to be a citizen in a Republic. Thank you Felix for giving us a brief sketch of how the myth of the "American Dream" maintains an aristocracy that the English would have been thrilled with. It is the envy of the old aristocratic world.
Neocons complain about the government getting into their pockets while at the same time they don't have a problem polluting the environment for future for today's jobs, building border walls and running endless wars. Too bad they don't follow their own poor advice. George Washington violent supressed the Whiskey Rebellion, which was against taxes, in the Pennsylvania region. A founding father killed other Americans because they refused to pay taxes.
Mr. Salmon seems to miss the point of of being an American, entirely. Very simply, we oppose taxes because we don't want the government in our pocketbooks. Also, my just having returned from visiting family in England causes me to suggest that Mr. Salmon recheck his information on percentages of income taxes in that country.
This is the most absurd commentary I've ever read or heard. In England everyone knows his or her place with little social mobility--in the U.S. class is very fluid. I was stunned to hear the nonsense that was meant to confirm the average liberal MPR listener's own vision of this country. Talk to any Brit who arrived here with little and made a very good living,and you will hear a very different version of what is. Oh, I loved the hurrah for cradle to grave education that is evidently on the skids in the U.K. I don't know what reality this guy is coming from but it is not in the U.S. P.S. My 25 year old son came laughing to me with this rediculous story
