Last time on JustProphet.com:
Something about bread as money, metaphorically…
Clearly if anyone gets the jump on the local economy, they are quickly put in a position where retaining their wealth, and often increasing it, is easier and easier. With more wealth comes more power and with more power it is trivial to gain yet more wealth.
Taxes inhibit that trend a little bit, but that is not exactly what they are designed for. Taxation can be defined as follows:
“The purpose of taxation is to raise revenues for the functioning and running of the government machineries. Taxation also improves the services the government offers to its people and also increases the quantum of revenue collection.” -Ask.com
Government machineries come in a great many forms and are arguably absolutely necessary for a “society” to even function. Clearly roads, bridges, sewage systems, water filtration plants, electrical grids and other infrastructure don’t build themselves. Without government, these things would only exist if an individual were to pay for it themselves and clearly it would be silly to expect anyone to pay for this infrastructure for everyone. So the government collects taxes and puts that money directly back into society in the form of infrastructure and of course government job salaries.
It is important to understand that governments don’t hoard money, any income is eventually spent, putting that money back into circulation, and the more money flows, the better the economy functions. In a recession a combination of high prices and lower wages result in less cash flow in general; further compounding the effect is the tendency to start saving one’s money. When times are tough, we don’t go out and spend frivolously, but this restraint locks up funds, revenues shrink and then so do wages and this downward spiral continues, bringing the economy with it.
Although many people complain about the inefficiencies of government spending, it seems like they forget that all of that money, every cent of it, gets put back into the economy. This is in contrast to corporate profits which often get siphoned into tax shelters, bank accounts or more recently just get sent directly to China.
You have corporations like Walmart, who undercut local shops by buying from slave labor countries, who pay their workers just enough to only be able to afford to shop at Walmart. This destroys local economies, this destroys the countries financial situation in general as Americans aren’t paid enough to live well and all the profits leave the country, never to return. But I digress…
So taxes don’t just redistribute wealth, they pay for the very underpinnings of society. They pay for police, firemen, schools and teachers, judges and prisons, parks and infrastructure. Almost everything you associate with modern society is paid for through tax revenue.
Now let’s look at tax rates. First there are progressive tax rates, which means that the less you make, the less you pay in proportion. This makes sense because if you earn very little money, clearly you don’t have a lot of excess revenue… you might not spend your money very wisely, but it’s not like you have a lot to be irresponsible with in the first place.
Then there’s the middle class which earns more and pays a higher percentage of their revenue. This trend is logical, as these people will in fact make more net revenue then their lower earning counterparts. They pay more but they also tend to have benefited more from previous government spending. These people probably have bigger houses, more cars and in general probably consume more. This puts a bigger burden on infrastructure so paying more in taxes is only fair.
Then you have the rich and ultra rich. As it stands now these people do pay a slightly large share of their revenue, as much like the middle class they tend to consume a lot more, often indirectly, but more nonetheless. If you’ve struck oil, government built and paid for infrastructure is 100% necessary for you to carry out your daily activities. Everything you make is made possible by tax revenue and the more you use these government services, the more you should be responsible for helping to support it.
People often look at this the wrong way. They look at a millionaire’s tax burden in terms of fixed dollars, and say “hey, that guy pays more in taxes than I make in a year!” This simplistic view is often more representative of the ignorance of the individual claiming it then it is of reality. Consider the following:
You own a business and employ hundreds of people. You rely on roads, electricity, water, bridges, tunnels and many other government built infrastructure to be able to do anything. Your profits, although you should be proud of helping to create them, are in no way shape or form all because of you. In fact it is rare for the rich to actually be the ones who “make” their money, their employees do. Their employees also use roads, bridges, electricity, etc… All of these activities that put pressure on the system are caused by you, and although you are a job creator, you are also using a great deal more government services than anyone else. You should then be responsible for putting a proportionate amount back into the system. Any other view is that of greed.
So what should we be looking at if the dollars paid in taxes is not representative/meaningful? What should these often highly intelligent entrepreneurs get as a reward? Clearly a lot of money is a good start… Maybe it makes the most sense then to look at their net income compared to the average, or more appropriately compared to their company’s average. That would be fair wouldn’t it?
I don’t think it is objective to look at the money paid in taxes and claim that those amounts are significant when the cost to society are extremely difficult to add up, especially if you factor in environmental damages that are then passed on as health care costs. Surely businesses that hurt the environment should pay a rather large proportion to keeping society clean and healthy.
The world is a lot smaller than it used to be. People are getting sick and tired of abuse, or inequality, of injustice and of unethical behaviour in general. When you hear people say that the rich don’t currently pay their fair share, they are not saying that they don’t pay more taxes than you, because that is relatively meaningless. What they mean is that the benefits they reap from the system are not being paid forward. There is way too much taking and not nearly enough giving, and many of these issues are not measurable in terms of dollars, or at least you’d have to be a finance/economic expert to fully appreciate them.
The problem is that in our world, these experts are the rich ones, and there are few stronger desires in this world then to become wealthy, regardless of the human cost. Experts make the money and set the policies, there is no bias more blatant than that.
If the rich were taxed their fair share, it would be 70-80% of their income and that would be fair, because if you do the math, anything less leads to environmental, societal and economic degredation.
We live in a world where the rich are more wealthy and powerful than any king, dictator or emperor has ever been in the history of man kind. It goes against all notions of equality and morality, and the only thing fighting back against this realization is greed and the idea: “If I become rich someday, I won’t want to pay it forward or share any either.”
Greed is our generation’s war, and we are losing.