Whenever I end up in a conversation with a conservative about taxes I often feel like we’re talking past one another. This is both our faults because when we’re talking taxes we’re often looking at different sides of the ledger. My primary concern is making sure the government has the resources it needs to do the things it must. Most conservatives would argue the point about doing things it must, but we’ll get to that. For conservatives (from what I understand through conversations) the primary concern is who has to pay for these governmental “needs.” It is as if we are standing back to back in the middle of a field and trying to convince each other that only the part of the field we are looking at exists. This is no way to have a conversation, but it is a trap that we fall into all the time. The conversation goes something like this:
“I think we should raise taxes on people earning over $250,000 dollars in income a year.”
“That’s punishing success, it’s socialism!”
“Um… that’s not how socialism works.”
Okay I made that last bit up (the communist part, not the socialism part), but people are really passionate about this whole taxes on people making over $250,000 dollars, which is curious to me. Conservatives will tell me that $250,000 dollars is not a lot of money, and it’s a lot less than it used to be and if their a Ron Paul acolyte they will bring something up about going back to the gold standard. I agree with all this (well not the gold thing that’s crazy talk) the thing that confuses me is why this is of such great concern to conservatives. $250,000 dollars may not be that much money anymore, but right now most people don’t make anywhere near this amount.
We are the 19.9%
Only 20% of the country makes a six figure income. Let me repeat that another way, 80% of the population makes under $100,000 a year. Giving the benefit of the doubt that both members of the marriage work this would still put 80% of households under the $250,000 dollar threshold. Add to it people often sink large sums of their annual income into homes on which the interest is tax deductible, the amount of people affected by this rate increase would be considerably less than 20%.
“But,” my conservative everyman would say, “its the principal of the matter; I don’t want to make more than $250,000 dollars if I know I’ll have to give more to the government, what’s the point?”
It is here that we actually get to the heart of the problem. It isn’t that we are taxing people who make over $250,000 dollars a year. It is that people believe there is a good chance they could actually earn over $250,000 dollars a year. The median income in this country is around $50,000 dollars a year this means more than half the population would need to more than quintuple their income to make it to $250,000 dollars a year.
With a little luck
The American story is that with a lot of hard work and a little bit of luck you can make it in this country. The point I’m trying to illustrate here is that statistically speaking this just doesn’t add up. If it does it means 80% of the population is just lazy. I’m sorry but I believe in my fellow Americans too much to buy this. The truth is you need a lot of hard work and a lot of luck to achieve success in this country. What’s wrong here is that the ladder to success is missing a few rungs and unless you’re one of the few lucky ones with a grappling hook you can never climb it.
Equality: Outcome vs Opportunity
This is where it gets messy. When we talk about lack of equality in this country everyone cringes. It’s the rarely addressed dirty little problem we have and no one knows how to fix. The problem is 80% of the population earning under $100,000 dollars a year in this day and age is not the hallmark of a fair system. If we no longer consider $250,000 dollars as a large sum to make in a year the fact that more than three quarters of the population can’t honestly fathom earning half that is a system that is totally out of balance. For the last few decades the case has been made that we don’t have to worry about equal outcomes, all we have to worry about is equal opportunities. The thing is if we say everyone has an equal opportunity to earn $100,000 dollars a year and so few people are capable of actually achieving it then the opportunity wasn’t all that equal.
The problem is we don’t talk about opportunity this way. It is one of the reasons affirmative action is such a heated topic. Affirmative action was an acknowledgement that the outcomes were not statistically equal even though everyone was given a shot. The problem is for many affirmative action is seen as taking away opportunities from people who are equal in ability. I wouldn’t even necessarily argue against that being the case. The thing is affirmative action at least attempted to bridge the success gap. Unfortunately it left a bad taste in people’s mouths and since then we haven’t tried to do anything else.
Creating a standard of living
I think the conversation needs to shift from which politician is going to raise or lower your taxes, to which politician is going to address your quality of life and the quality of life of your kids. Which politician is going to make it more likely that you will actually achieve the life you’re working so hard for. Personally I think if the government builds high quality schools and roads, invests in improving our energy grid, and makes sure our air is fit to breath and our food is safe to eat it will ultimately improve my chances of building the life of my dreams. For that I’m willing to pay more especially if I’m really lucky enough to earn more than $250,000 dollars a year.