With a military escalation in Afghanistan estimated to cost one million dollars per soldier per year, a health care legislative package that could cost trillions, not to mention escalating costs in dozens of federal programs, both the Administration and the Congress are looking for ways to come up with more funding and/or reduce the cost of existing programs.
The easy target, of course, is to aim at the “undeserving rich,” such as Wall Street hedge fund managers and investment bankers and tax them more heavily. And between the expiration of the Bush tax cuts and various administration and Congressional initiatives, it seems unlikely that the “rich” will escape greater taxation. The problem there, of course, as I’ve noted before, is that most of the “undeserving rich” will escape the majority of the proposed taxes, while the upper middle class will pay for most of it, because, for some strange reason, the political mindset is that anyone who makes over $250,000 is rich. Yet, in practice, most tax avoidance strategies don’t work for couples who make between $250,000 and $400,000. In fact, the more money you make, the better they work. So these tax increases will hit the hardest on those couples in high cost-of-living cities, such as New York and San Francisco, particularly those where both spouses work long hours and who, facing high mortgage and schooling costs for offspring, would laugh bitterly at the idea that they’re rich. Do they really “deserve” to be the most heavily taxed segment of the population? Certainly, they’re anything but poor, but for the most part, the vast majority of their income is earned through long and hard work, and they’re not the ones with the mansions and the yachts and the fabulous vacations.
At the other end of the income spectrum are the “poor.” Like the “rich,” this catch-all definition includes all manner of people, except the poor range from third-generation welfare recipients to hard-working minimum-wage level families, from drug-addicts to disabled individuals who need support services, either to work or just to live, from the able-bodied employable unemployed to the mentally-disabled unemployable. And society has effectively said that all of them are deserving of governmental aid, in some form or another, if not in several forms.
But… exactly who is “deserving,” and of what are they deserving?
Both the Iraqi and Afghan people deserve better governments and lives, and we “deserve” not to be at the mercy of terrorists — but “deserving” or not, does spending all those resources and lives in the Middle East really make sense? On the domestic front, why should middle-class taxpayers subsidize families and single mothers who knowingly have child after child that they cannot support through their own efforts? Why should hedge fund managers who get multimillion dollar bonuses for gaming securities in such a way that it continually threatens our prosperity pay lower effective tax rates than say, primary care doctors or college professors? Why should taxpayers have to fund rehabilitation efforts for teenagers and adults who make bad choices and become addicts?
One answer, of course, that applies to the “poor” is the children. If society doesn’t maintain some living standards for the poor with children, the argument goes, then the cycle of poverty and violence is merely repeated generation after generation, and besides, the children “deserve better.” But with forty percent or more of the American population paying no income taxes at all, virtually all of them, despite the rhetoric, either working-class or poor, and something like 20% of the remainder paying 80% of the taxes, how long before the “needs” of the “deserving” — both internationally and domestically — overwhelm the American mid-middle class and upper-middle class?
Don’t they “deserve” some consideration as well?