Jsyte

Why higher taxes on the wealthy doesn’t hurt

There’s a big deal going on now about having people and families making over $250,000 a year pay their fair share of taxes. Warren Buffett (one of the richest people in the world) wrote a now-famous op-ed asking our leaders to “stop coddling the rich.” He pointed out his secretary pays a higher tax rate than him. The Republicans, of course, will say that taxing the rich will somehow cause rich people not to create jobs. Funny how they don’t seem to be creating jobs either way? But that’s not what I’m here to talk about.

Let’s imagine Alice and Bob are a couple who make a combined income of $250,000 a year. For the sake of simplicity, let’s say that’s their adjusted gross income (AGI) so that we actual deal in that tax bracket (so in reality, they’re making more, but after deductions and other neat little loopholes, they get that number as their income). So that’s a pretty big number, let’s break it down into more manageable numbers.

Dividing equally across 12 months, they’re making $20,833 (and change) a month. To put this in perspective, a minimum-wage (say $7.50/hr) employee working 40 hours a week every week (52 weeks) makes $15,600 a year. So this family could hire someone at minimum wage to work full time cleaning, cooking, getting the mail, or whatever and pay their entire yearly salary in a month and have money left over.

A family plan with two people sharing almost unlimited minutes with unlimited texts and data comes out to about $150/month. Let’s say they live in a reasonable house for two people and their rent or mortgage is, say $3000/month. Power bill is maybe $200/month at most. Cable and TV are an additional $100/month. Count groceries as $300 a month (which is pretty damn lavish, I go around $25-30 a week, or close to $100 a month), car payments at another $200 (with insurance at $50) and we’re at $4000/month. Miscellaneous other expenses may chip away more than that, but if I were budgeting my ideal life, this would be pretty sweet. In fact, a family making about $60,000 a year could live like this.

Dividing equally across 52 weeks, $250,000 is $4,807 (and change) a week.  So this family can take care of all their month’s bills in a week’s paycheck. So what about the other weeks? Where does that money go? Well, chances are, if you have this money you will start thinking about investments. This is the dividing line between the different “classes” everyone is talking about. Someone making $250,000 a year can live a nice life (and not have to worry about having enough money to eat or pay rent) and have money left over to invest. Alice and Bob can put money aside in stocks, retirement accounts, savings, bonds, CDs, etc. and have money just sitting there, generating interest, dividends, or gains. The fact that they have money means they can get more money, simply by having money! Investing (if done right) can be an upward spiral. Even the compound interest formula shows an exponential increase over time.

Someone who makes the minimum wage cannot afford a nice home or the other things on my list. They barely make enough to feed their own mouths. If the rich couple has a kid, they can buy all the nice things and support their child well. If a poor family has a kid, what do they do? Do we tell them not to reproduce? Do we let the kid starve? No, we live in a society where we don’t let that happen. We’re taught since we were young to care for others. The Bible teaches to “love thy neighbor.” Yet here we are, figuring how we can cut programs that support the general welfare of fellow human beings just to keep the rich happy?

The real class warfare is being fought by the rich against the poor and middle class. You have Florida Governor Rick “Voldemort” Scott who implemented a ridiculous plan to drug test people applying for welfare (those applying would pay for the test and if they passed they would get reimbursed). The results, however, are not looking to good for Scott. Not only is this not saving the state money, but it’s also going on the assumption that poor people are more likely to do drugs. News flash! Drugs are expensive! Yet I don’t see us drug-testing bank executives who have taken HUGE bonuses after being bailed out by the government.

Cuts to education keep poor families poor. A good education and scholarships can let smart kids from lower-class families move up and make something of themselves. A good education system means we produce bright minds that will go on to create marvelous technologies that will create new jobs. These jobs, however, require skills. So we can have lots of jobs available, but we need an investment in education so we have people to fill those jobs.

So the next time you hear someone claiming “class warfare” against the rich, remember that nobody wants to be poor. Everyone would like to make $250,000+ a year. If taxes make you want to make less, then you probably don’t deserve that high of a pay for how stupid you are. You pay your taxes because you are enjoying the services of society. You are a human, and you are not “entitled” to take whatever you want from this world. We have rules in place to protect private property, but in exchange we ask payment to help protect that property from others by police force, from damage by fires and building codes, by definition from laws and courts, from other countries by our military, and to help you get it by ensuring you can grow and live in a safe environment, where the food is safe to eat and the water is safe to drink. We have an education system so that you can learn about things to get a good job and interact with others around the world, and so that other people can be good employees or contractors.

And yet ironically, the same people that are against having that basic system still want a government to tell me who I can marry, what kind medical practices are okay or not, which deity is the right one, and what words are okay to say? Their priorities are seriously messed up.