How much should the rich contribute?

I wrote the essay at the bottom of this post on June 23, 2012. I submitted it to the New York Times (because they’re my favorite newspaper). They didn’t run it.

But on October 26, 2012, Yahoo published this story: “Do the Rich Have a Moral Obligation to Pay Higher Taxes?”

(As usual, I see the Zeitgeist. But more importantly, other people are asking the same, important questions.)

Here’s my essay:

“What Should We Expect of the Rich”

In his TED talk, Nick Hanuaer says that rich people don’t create jobs.

“We’ve had it backwards for the last thirty years. Rich people like me don’t create jobs. Jobs are a consequence of an ecosystemic feedback loop between customers and businesses. And when the middle class thrives, businesses grow and hire and owners profit…Taxing the rich is the single shrewdest thing we can do for the middle class, for the poor, and for the rich.”

What should we expect of the wealthy? Just that they bear their share of the burden.

There is no reason to penalize the wealthy, but there is every reason, from logic to economics, to require the rich to bear their part of the financial need of a county and planet. The wealthy ought to pay the same percentage in taxes as the rest of us.

But that is not the current system. Currently, the wealthy pay a lower percentage in taxes than the rest of us. It is so absurd that even the (sometimes) richest man in the world, Warren Buffett, spoke out about it, saying, “My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.”

One sub-group of the wealthy, hedge fund managers, pay less than half the tax rate the rest of us pay. They are the only earners in the world with this tax break. Journalist Pat Garofalo points out that:

It would take the combined income of 441,000 middle-class families to equal the income made by just the 25 richest hedge fund managers. The top hedge fund manager at the moment, John Paulson, makes more hourly than most Americans will earn in a lifetime, while paying a lower tax rate.

Closing this loophole would raise more than $4 billion per year just from the 25 richest hedge fund managers, according to calculations by RJ Eskow. If just 25 people paid taxes like you and me, we’d cut $44 billion of the national deficit in ten years.

It sounds crazy because it is. One reason for an equal tax burden is that anything else is literally insane—so illogical that it cannot be defended. Another reason is that it is the only sustainable financial policy. Taking more and more money from those who don’t have money will never keep up with the demand of a growing, national economy, much less a globally-connected economy.

Milking the poor and middle-class for more and more is not only illogical, it is sick. It is a cruel joke. The punchline is that though the poor and middle-class feel every dollar of tax, the wealthy do not. Paying 20% of $1 billion still leaves you with more money than the rest population will see in their entire life. (Indeed, paying 90% of $1 billion still leaves you with more money than the rest of the population will see in their entire life.)

There is no reason or benefit in absolving the poor from tax responsibility. Nor would good come from penalizing ambition, or wealth, or even greed. But we can insist that those with wealth bear their share of the load.

Or can we ask for more?

Plato argued that once a person achieves enlightenment, they are not only best suited to lead, they are obligated to lead. That reasoning, which has stood history and scrutiny, can be applied to the problem of the tyranny of wealth.

Those with wealth are certainly better able of solve needs and help humanity. Does that mean they obligated to?

The richest individuals of modern times, Andrew Carnegie, John D. Rockefeller, Warren Buffett, Bill Gates believe so. Carnegie wrote “The Gospel of Wealth” in which he claimed that the wealthy should accumulate money, then purposefully distribute money. Rockefeller followed Carnegie’s ideas. Bill Gates and Warren Buffett also subscribe to those principles.

But really, what else are they going to do the money? Buy a second megayacht? (Actually, some do.) It appears that once a person encounters wealth, a strange and terrible thing takes over. A corrupting of the soul occurs. The more you have, the more you want. Few wealthy people have ever resisted this corruption. The condition is not exclusive to the rich. But there is a difference between wanting more and wanting more than most countries need. (Honoré de Balzac claimed: “Behind every great fortune there is a crime.”) Are there some common causes of this disquiet?

In his book, Outliers, Malcolm Gladwell argues that all success is circumstantial. This past graduation season, one of the few commencement addresses to go viral was by bestselling author Michael Lewis. The thesis of his speech was that success is based on luck. In the past several years, I have heard a successful author and a successful filmmaker, separately, say that successful people feel a low-grade terror, a nagging fear, that they will be found out as frauds: as no more talented or deserving than anyone else. The Hollywood insider claimed that this sense of undeservedness is a reason for so much drug and alcohol abuse among celebrities.

If these claims have merit, then our question solves a great many problems, from a county’s revenue to a person’s conscience.

What should we ask of the wealthy?

At least what is asked of me. Maybe more. For everyone’s sake.

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4 comments

  1. Ohhhh, that is absolutely beautifully written and powerful… wow, thank you for saying, so well, what the rest of us are feeling.” What should we ask of the wealthy?
    At least what is asked of me. Maybe more. For everyone’s sake.”

    Perhaps the NYT panders (is that the right word?) to the wealthy subscriber and advertiser? From the Gospel of Wealth to the Gospel of Jesus Christ, life is all about giving.

    Well said… and spot-right-on…. every word.

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