Friday, May 15, 2015

Where The Wealth Is, Part 2

Fortune Magazine, Yahoo Finance, and Bill Gates' Blog are three spots where I came across references to wealth, inequality, and the 1% since I last wrote on May 6th. Which is to confirm what I already have said, that this isn't an issue that is going away.
Glenn Beck may at some point catch up, but the contrast to these intelligent opinions is striking. Especially Bill Gates, who contributed ideas, not mocking attacks.
I'm not smart enough to come up with great new ideas, but I have my opinions. One opinion I have is that this issue is going to steam roller the Republican Party unless they start cramming.
The Democrats have a less than idea candidate to champion wealth related positions in Hillary Clinton, but its been my experience that for the left its the ideas and causes, not the character and personal failings that swing their levers.
So I don't think there will be a Romney-esque label placed on Mrs. Clinton that will succeed in distracting attention away from the validity of the ideas and statistics related to wealth disparity.
Here is one idea that I believe is going to up end conservative voters and leave them behind: the flat tax.
The flat tax is an idea that conservatives have dreamt about for years. Its been highly regarded and also disregarded, some think of it as a panacea for what ails the tax code and the bloated IRS. Others, like me, have come to believe that it would never overcome the vested interests, like the attorneys and accountants.
Plus the current tax code on income, although complex and unwieldy at times, is already regressive and somewhat fair. The complexity comes from the government valuing assorted behaviors from the people, and using the tax code accordingly to promote those behaviors.
The greatest deficiency of the flat tax idea however is that it targets the wrong thing, and this is where the progressives may find an election winning cause.
Income isn't where the money is at, its capital. What may come is an idea from the left, from the Democrats, to levy a flat tax on capital.
If you need a quick cramming on the distinction here, read the blog by Gates via the link I provided above. Its not difficult to understand. Taxing income, or labor, necessarily includes people who are already squeezed in this economy. Taxing capital is a whole different animal and captures wealth that escapes an income tax. The 1%, as it is, derives much of its wealth from capital, not income. They don't hold jobs, they employ capital.
In short, income taxes, a flat income tax specifically, doesn't change the equation we are a part of. The equation where the cliche that the rich are getting richer and the poor are getting poorer is valid and true.
Now the conservative arguments about class envy or class warfare are going to rise, but in the end they will be muted as more and more people come to understand the particulars of this topic.
Wealth distribution is out of whack, America is not as egalitarian as we think, upward mobility isn't as achievable as it once was in this country and statistically, historically, we as a society are as stratified into have and have not's as at any point in the past. The past being in all recorded modern human history. Understand there were times that were very, very stratified between the have and have not's, like 1800's.
The world wars wiped the wealth away from the 1% in the last century, a reset occurred. Since then they've come roaring back and are on course to truly dominate human kind like never before. This isn't a question of punishing the wealthy, but preserving opportunity for all.
Or we can wait, or hope, for a global calamity to do the job. That's not an approach I would champion.

No comments:

Post a Comment