Letter: Reduce tax disparity to help middle class
Based on U.S. Census data about St. Cloud's population and its per capita income, the combined income of all its residents amounted to a little more than $1.5 billion in 2012. That's a lot of money, and it reflects the hard work of people living here.
But even if we pooled that income, we would still be sixth on Forbes' 2013 list of most highly-paid hedge fund managers. That's right. Five different individual managers received bigger paychecks than every person combined in this city last year.
If you ask me, that's absurd.
We tend to think of the amount a person gets paid is a reflection of her or his hard work, productivity and innovation. Does this mean that each one of these five hedge fund managers did more than every man, woman, and child in the entire city of St. Cloud combined?
Partly, this reflects the superstar effect: Because a hedge fund manager can use the same strategy on $1 billion just as easily as he can on $1,000, the best managers can attract huge amounts of business (in contrast, the world's best farmer can only tend so much land). But just because there is a reason for something doesn't mean it's right.
The good news is that this disparity represents an opportunity to reduce taxes on the middle class. In practice, we do this by instituting a progressive tax on wealth, and use this revenue to relieve the burden faced by ordinary Americans.
It's not a new idea – homeowners in St. Cloud (and around the world) are already paying a wealth tax if they own a home. It's called property tax. Why should property in the form of stocks owned by billionaire investors be any different?