Ordinarily I try to avoid discussing politics outright on my blog, but it's tax-free week in the great state of Maryland. Sales tax, that is. You can shop in Maryland this week without paying our too-high-if-you-ask-me 6% sales tax! Isn't that fabulous? In honor of it, and with a little inspiration from a tax/wealth redistribution conversation I had with a friend of mine this morning, I'm going to talk about taxes. Oh, it's your favorite topic? How did I know?
Tax-free week of course is intended to encourage people to go out and shop. You get your goodies for less than the usual price because you basically get a 6% discount on everything. That's pretty sweet if you ask me. It works because as common sense tells us, when things cost less or when we have more money to spend, people will spend money. This in turn is good news for an ailing economy. Sadly, tax-free week isn't quite enough to drag us up out of the current economic slump, but it will make numbers look pretty so that politicians can brag a little about "growth."
That said, the conversation I had with a friend earlier today was sparked by this article written by well known philanthropist and super wealthy guy, Warren Buffet. In it, he states that the super rich in America just aren't paying enough in taxes. For my friend and I, this translated into a redistribution of wealth conversation. His (my friend) big question was, why do "have-nots" defend the "haves" when it comes to paying taxes? I don't really consider myself a "have-not" but compared to the mildy affluent-super rich, I guess I have not. Whatever. Anyway my answer to his question was simply this- to me personally, it's just common sense. I have never understood how having less while others have more gives anyone the right to anyone else's earned income.
I like to look at it without the filter of the government and taxes, person-to-person. Most of us probably know people who earn less money than we do. On that principle alone, if you were not already paying taxes, would you run to those people on pay day and write them checks from your own bank account to make sure that yours and their incomes were the same? If not, are you a greedy (insert mean name)? Flip the coin. I'm sure even more of us know people who earn more money than we do. Our parents are probably example numero uno. On pay day, again if not for taxes, would we demand that those people fork over a portion of their pay so that we took home the same amount of money as them? Would that seem fair and reasonable? Or are those people greedy (insert mean name) if they didn't volunteer to do that?
Let's make me an example. I'm a teacher. We earn not-so-much compared to a lot of other professions. Many of my peers earned $10k+ more than I did with a master's degree. So as a teacher, with teacher training and degrees, does it make sense that I go home with the same pay as a highly skilled surgeon? A rocket scientist? A computer engineer? A CEO of a multi-billion dollar company? Some would say yes, I suppose. My response would be that I get paid for my level of skills and training, and for what I do. By the same token, I don't think I owe a portion of my (already minimal) income to someone who sells fake hair pieces in the mall so that our incomes are equal. Teaching children is more valuable to society and the world than fake hair. You don't deserve the same income! Call me harsh, but if you flip burgers your job is less important than a surgeon saving lives. Twist it around to claim the burger-flipper is providing nutrition and a basic need and all that. What would we do without them? Still. The surgeon is more valuable. People don't depend solely on burgers for nutrition, but they sure as heck need a talented and skilled neurosurgeon to operate on their brain if they want to survive. But why go to the effort of being a neurosurgeon if you can flip burgers (or sell fake hair!) for the same income?
Let's do a student-based analogy. You're a hard worker and you study at least 15 hours per week for your classes. You always complete your assignments on time and to the best of your ability. For you, your education and school work is top priority and when you get an A, you probably feel that you deserve it for all of your hard work. Would it then be fair to say that your classmate who got a D deserves part of your grade because you got so many points and he got so few?? The poor guy! How will he pass the class? There you sit with all your points, and As, and extra credit, and poor Classmate barely has a 60%. What are you, some kind of monster? Certainly it is your responsibility to boost his grade with all your extra points since he just has none. It doesn't matter why- he may have tried and not done well, he may be in a class-level above his ability, or he may just be sleeping in class knowing that you'll earn enough points for the both of you. The simple fact that you have so many and he has so few means that you owe him your points. In fact, the teacher will take them anyway. Now all of your hard work earns you Cs while Classmate is also earning Cs for the work he is not doing and the information he has not mastered. Still feel like putting in all those hours of studying? Didn't think so.
I simply can't find the logic in claiming that the fact of having more or less either entitles you to someone else's money or means that you owe what you've earned and worked for to someone else. WHY? I get that there are people struggling and in need. Help exists and I strongly believe in it, when used responsibly. Yes, I agree the rich could pay more taxes because they can afford it. But there are certainly a lot of people (a little less than half the population) out there who pay NO taxes, or better yet NEGATIVE taxes - the government pays them - who could pitch in a little too. If we're going to talk about fairness here, why do few pay most of the taxes while many pay none? Should we go all-out and make the tax rate flat across the board? No, of course not. But according to the spoiled child philosophy of "he has something I don't have, make him give it to me!" that would serve to reason.
My bottom line is that people deserve to keep and spend the money they earn. If you're a smart enough investor to make money with money - you deserve it! No one else took part in that (that didn't already get paid), therefore they do not, by principle of having less than you, deserve your money. I don't care how many billions of dollars you have. I certainly think you should help the less-fortunate by donating to worthy causes, but I don't believe you should be forced to surrender it by law (beyond a reasonable tax rate) simply because you have it and someone else doesn't. I do, however, find it a little comical that a well-known philanthropist brags in the article about how little he had to pay in taxes. Perhaps he has written off a few of his gigantic charitable donations???
Ok, this is long enough and I think (I think) I've made my point. Down off the soapbox I go. Do feel free to share your own thoughts/feelings on the article, taxes, or anything I've said. Am I wrong? Tell me why. I'd absolutely love to hear the rational (key word!) explanation for why "have nots" deserve money from the "haves."