Time for the Wealthy to Pony Up
We have a colossal mess and we need a colossal sacrifice to fix it.
When I was young, I was much more conservative than I am now. I believed strongly in capitalism and would have reacted angrily to any suggestion of “socialized” medicine. While not totally against welfare programs, I felt that only the hopelessly stupid or desperately ill needed such help — anyone else was just lazy. I was against high taxes and didn’t think graduated income tax was fair to the wealthy. I would have made a good Republican on the fiscal side, though I didn’t like their positions on individual rights even then.
“Any man who is under 30, and is not a liberal, has not heart; and any man who is over 30, and is not a conservative, has no brains.” — Sir Winston Churchill
Contrary to Sir Winston’s opinions, I’ve become less conservative as I aged. Today I think we need more social safety nets, far higher taxes on the rich, and I believe we need “socialized” medical care.
My wife commented on this transformation of my ideals and asked why I have changed so much. I thought about it for a minute and answered that actually, I haven’t changed that much — what has changed is this country.
In 1970, I was 22 years old. The top tax bracket in the U.S. was 71.5% for net income over $200,000. That had been 77% in the previous year. Unions were still strong, and there were still many single wage-earner households. Almost no one had medical insurance, but medical care wasn’t expensive. I had health insurance through my work — it was an insignificant expense. Even when I started my own business and had to pay all of my medical insurance, that was never an expense that concerned me. That would not be true today!
We were able to buy a house in 1973. It cost us $24,500, but our income for that year was more than 50% of that amount — and my wife only worked part-time, earning a whopping $1,400. We put $5,000 down on the house, which gave us a mortgage and tax bill of $200 a month. We had a six-year-old child and another on the way. We bought a new car, a 1973 Gran Torino Sport. I can’t recall what we paid for it, but the sticker price was around $3,700.00. Our income rose by 25% the next year — life was good, and most of the people we knew were doing just as well or better.
Contrast all that with today. Far too many people who are drowning in debt, living paycheck to paycheck. Many could be driven to bankruptcy by an illness.
My wife is ill. We are retired, collecting Social Security and drawing from our savings and retirement accounts. Even with Medicare covering medical needs, we still have to budget $650 a month for insurance, copays and drugs that my wife needs. We can afford that; many people of our age could not.
The wealthy are paying very little in taxes today. The top tax rate is around 43%, but most of the wealthy pay about 24%. In fairness, 71.5% vs.43% doesn’t tell the whole story because deductions have changed, and the AMT (Alternative Minimum Tax) comes into play now. But overall, with everything factored in, the middle class has been steadily losing ground for many years. The wealthy have been living higher and higher on the hog.
I’m sick of it. It’s not envy: I don’t want a lot of money. All I want is to feel secure and safe. Compared to many people, we’re actually in fairly good shape: we have a home, we have income, we have retirement funds that we can draw from.
Republicans insist that increasing taxes on the wealthy is harmful to the economy. They are fond of quoting things like “The Top 5% of Wage Earners Pay over 50% of Income Taxes” and that the “wealthiest 1% pay 37% of total taxes”. Let me ask the obvious question: why shouldn’t they pay more?
The middle class can’t afford the taxes we pay now. All around us, it seems like nobody has enough money: our roads are crumbling, bridges are rotting away, schools are begging for money, social programs have been slashed — we need more taxes, and the middle class can’t pony up. The wealthy CAN pay more, and they should. Not just because children and families are suffering, not just because their conscience ought to make them WANT to pay more, but their own selfishness should make them realize that they have created an ugly society that is only going to get uglier. Crime is up, and our world is crumbling. It’s way past time for the rich to step up and change this.
We need real tax cuts for the middle class. The most burdensome tax for small businesses, lower-income people and most self-employed people is the payroll tax — the tax that is nominally for Social Security but in reality, has nothing to do with it. It takes 7.65% from employers and 7.65% from employees. Self-employed people pay the full boat — 15.3% flat. There are no exemptions, no deductions — and even quite a few Republicans think it’s a bad tax.
However, it provides about one-third of overall tax revenues. Isn’t that interesting: a tax that stops at $8,494.00 pays about 1/3 of our overall taxes. For somebody earning $137,700 a year (which is where it caps), that’s 6.2% of their income (plus the 1.45% Medicare tax which has no cap). An executive with a $10 million bonus pays the same $7,347.00 and no more (though they have to pay the 1.45% Medicare tax on all wages).
Are the rich paying their share of that tax? No, of course not. One-third of our tax revenue comes from a tax that regressively targets the lowest wage earners. That 6.2% with a cap of $8,494.00 is meaningless to the big executive, but it means a lot to low-income people. It’s significant for the middle class, too — $8,500 happens to be exactly what I need to pull from retirement funds this year.
We need “socialized” medicine. We already have a lot of it: more and more retiring baby boomers are covered by Medicare every year, and Medicaid covers many poor and disabled folks. The Children’s Health Insurance Program Reauthorization Act extends coverage for children into middle-class incomes. The only people who don’t get any help are the same people overburdened by taxes: working-class adults. These are the people who can lose everything from a catastrophic illness.
We need to rebuild our roads, our bridges, our schools. We need social programs to reduce crime and lessen drug abuse to help the underclass rise up to productive levels.
The middle class can’t pay for all this. The rich HAVE to step up and recreate a decent world for all of us. Don’t feel guilty about demanding that they do this: remember that many got this wealth by dampening middle and low-class income, by exploiting third world labor, by manipulating sweetheart tax deals for themselves, by robbing our retirement funds; most have no excuse to cry “unfair!”. As for the rest, the movie stars, big-name music stars, and sports celebrities: they’ve been siphoning from the lower classes too. It’s time for all of them to dig deep and pay back what they took.
It was YOUR work that made them rich. Don’t ever forget that. You are the ones making those million-dollar paychecks possible. Without the middle class, the country collapses instantly. It’s your labor that built their wealth: it’s time for them to pay back.
Socialism? Call it whatever the hell you want to call it, I don’t care. We have a colossal mess, and we need a colossal sacrifice to fix it. The lower class wage earners can’t do it. The rich have to face the music and pony up.