Monday, September 26, 2011

Thinky Thoughts...

Amid all the class warfare and "tax the rich!" nonsense, no one seems to have stated the obvious. I figured this was because it WAS obvious. Now I am not so sure...

So, a little thought for those of you convinced the millionaires can make up the overruns on the public treasury: The "Rich" don't pay income tax. Because, technically speaking, they don't earn income. See, money comes from two sources. A man works and earns it from his employer. Or money itself works; it moves around in the economy, accruing interest and paying dividends. "The Rich" do not typically work for a living, they move money around. All the income tax reform in the world won't squeeze a dime out of them.

Which leads me to the obvious point... "The Rich" know how to move money around. They have a degree of economic mobility the rest of us lack. That economic mobility translates to physical mobility and moreover, to personal autonomy and socioeconomic power. I'll put it simply- you can't squeeze "The Rich" because "The Rich" have a power the middle and lower classes do not; if things get bad enough, they can leave.

They've been leaving for decades, and we as a nation are poorer for it, because they go, and they take their money with them. It stops funding innovation, research, and employment in this country, and starts "working" elsewhere. Meanwhile, the government starts looking around at who is left to take money from. The answer is always the middle class. See, the poor don't pay taxes; they don't make enough money to do so in our "progressive" income tax system. The middle class, however, are in a bind... they make "extra" money (by lower class and governmental standards) and they are tied to jobs, mortgages, and debts that mean they can't go anywhere. Often their "wealth" is tied up in retirement plans they dare not touch, and homes they cannot easily sell.

The truth of the matter is that "taxing the rich" is a myth, a dream. What they're really talking about is "taxing the trapped."


revogirl said...

The rich should pay tax out of their profits but as you have stated they employ a team of experts to get them off as much as possible.
I disagree with your statement that the rich can not be squeezed as they could be if the working classes organised themselves.

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