Evolution beats revolution in sensible advances in government and policy as well as leading to success in the natural world. But as the pinnacle, or dominant species, we have greater obligation to be fair to all, including the natural world. But today, I want to talk about taxes.
What is a fair tax for the rich?
Flat tax enthusiasts may be right that it would bring in more taxes if loopholes were closed. But I contend that the wealthy have and will benefit more than proportionately as compared to those in lower tax brackets. Taxes paid to build and maintain infrastructure, services and defense support the activities and property of companies and wealthy so much that their taxes are a real bargain. This consideration makes it reasonable to tax annual income above ten million dollars at a rate of 50% or higher. Executives of companies not paying income taxes or dividends should be taxed if their pay and bonuses exceed 100 times the median full time equivalent salary for the company.
The source of wealth deserves consideration in setting rates. Fairly gotten wealth should not be penalized, although capital gains exceeding the rate of inflation should be taxable for those of high net worth. Inflation is sometimes viewed as a tax on the rich, although it can be more devastating to those who have difficulty allocating money to savings.
Many high-income people deserve their pay. That includes many in the entertainment industries, founders of companies, unusually competent managers. But sources of exorbitant pay based on overcharging customers, underpaying workers, abusing patent and copyright protection, disproportionate legal fees, and other gimmicks should be highly taxed.
Questionable ethical practices such as skimming assets of corporations and sweetheart deals prior to sale or bankruptcy should not have tax evasive loopholes.
Many of the wealthiest individuals in the country not only deserve most of their pay, but they are also generous in philanthropic activities. Kudos to Warren Buffet for encouraging other billionaires to pledge half their wealth to good causes. Many of those are worthwhile causes but the money might do as much or more good if put toward reduction of the national debt.
How do social programs for others benefit the taxpayer?
Government sponsored health coverage for all benefits those able to pay for their own coverage by enabling cost effective programs. But major benefits are: removing the incentive for expensive hospital emergency rooms to be used by charity cases, with costs recouped from others by higher charges, when a clinic visit would have provided adequate care more efficiently; giving greater leverage for health care facilities to negotiate sensible prices for drugs; possibly better distribution of medical facilities; better opportunities for remote consulting and other inefficiencies such as record keeping using the internet; relieving companies of much of the cost of providing health care for employees thus making them more competitive in international trade; improving the health of the poor thus reducing cost of welfare programs.
Most taxpayers would benefit. Even the ones paying the most taxes would find that ending deficits by paying sufficient taxes would reduce loss of wealth from inflation. Free education through college for everyone would improve productivity by having more prepared for a better job and, if they don’t get a better job, not be fettered by massive student det. The overall effect would be an improvement in the economy at all levels.
Capitalism would benefit, especially small business. Investment results would improve for those stockholders robbed by inflated rewards for top administrators. Do the CEO’s of the large pharmaceutical firms all deserve annual pay exceeding fourteen million dollars each? Am I picking on the pharmaceutical industry- no, they are just the tip of the iceberg visible by data shown in the latest AARP Bulletin. Finance, energy, and health care industries are also among those wielding undue influence with Congress and distorting true capitalism.
Just remember, I’m a grumpy old man that may have it all wrong after looking at too many drug adds for the umpteenth time that are interrupting my favorite TV shows. You may have a president with the same problem. But think about it - who gets the benefit and should pay the most for roads, national defense, and other government functions - the indigent sleeping in a dumpster or a billionaire?
Joe Engemann Kalamazoo, Michigan May 15, 2017