(I’m broadening the discussion now.)
by Divorced one like Bush
Define rich. Define rich! Define rich?
That’s the come back every time the issue of raising the income tax on the rich come up. What is unsaid is: Go ahead. Define rich. I dare ya! (Triple dog dare at that.)
Fine. I’ll accept the challenge. But, first understand that I accept the challenge because having a definition of “rich” is needed if we are going to fix the money from money economy. We have to ask: When is enough, enough? We have to take the responsibility of having determined what enough is, if we are going to return to the ideal of our democracy. The ideal of equality of power. This ideal was discussed in my postings (3 of them) on taxation.
I think this nation used to know when enough was enough. We used to know what rich was. It was a life; as in “pick a life, not a job”. It was an ability made capable by the amount of money managed (not flowing) through one’s hands. That it was a life meant we did not fall for the rhetorical trick of: Define rich! I dare ya. The trick is that the question is asked in reference to defining levels of income at which a specified percentage of taxation will take place. It is the infamous black and white trap when we all know we live in a life that is the spectrum of color. Cross this line you pay, don’t cross it, then you don’t pay. As with all dares, there is a threat. The threat for the rhetorical “define rich” dare is that the moment a number is chosen, the one doing the daring will retort with a life example of the chosen number that under the life circumstances retort might not be considered rich.
Back when we knew what rich was, we had an income tax based on a spectrum of rich. In fact, something I quoted in my tax series confirms that we knew what “rich” was:
There was another agenda at play as well in the early years of the federal income tax: the desire to use progressive taxation as a way to “ stave off more radical calls for industrial democracy.” This explains why even some high-income Republican groups supported the Sixteenth Amendment. Andrew Mellon, Secretary of the Treasury in the 1920s and one of the wealthiest Americans, “ believed that keeping tax schedules graduated (albeit flatter) would mitigate radical demands for restructuring the capitalist system.”
Even the rich knew what rich was.
Let me say, for me wealth is not the rich I’m talking about. Wealth is another issue that should not be brought into the discussion of “rich” related to an income tax. It get’s thrown in as another rhetorical trick, the trick being that one will think about a dollar amount of wealth and then think how much money it took to get that wealth ala income. But, wealth is accounted under the asset category, not income.
Professor Mankiw posted in 2006 about a study that defined a level of rich world wide based on wealth which I think has a presentation ripe for rhetorical trap making. He quotes:
The research finds that assets of $2,200 per adult placed a household in the top half of the world wealth distribution in the year 2000. To be among the richest 10% of adults in the world required $61,000 in assets, and more than $500,000 was needed to belong to the richest 1%, a group which — with 37 million members worldwide — is far from an exclusive club.
So, from a global perspective, if you have net worth of more than $61,000, you are rich.
Really? Thirty 37 million members world wide on a planet of 6 billion is not exclusive? $61,000 of assets should make us all feel rich? The message (and I am not interpreting that Profressor Mankiw’s posting suggests any qualification) is that we should all feel equally wealthy and thus rich. Can you see how such a presentation could be used as a rhetorical trap in determining “rich”. So, let’s not go there. “There” is for the discussion of the estate tax. Besides, once the income has been turned into an asset, it’s kind of too late to worry about taxing the income. No?
Also, we are talking the United States of America. Not Zimbabwe. (See the above issue.) I know there are children starving in Africa. We have the same here, it’s just that the income needed here to not have a child starving is higher. Purchasing power parity and all that. Though, if we would be adult about the issue of “rich” and define when enough is enough, we would be able to do more for such people as there would be more left for them.
We have lost our definition of rich and I believe it was done intentionally. If you are rich, then what better camouflage is there than to undefine “rich”? And, what better way to undefine “rich” than to have an argument accepted that “rich” can not really be defined? AND, once you can’t define rich, well then hey, how can you single out anyone number as a line for having to pay a higher percentage of tax on their income? Thus, we should all pay the same percentage and thus obtain our constitutional nirvana of all man is created equal. Throw in a little pity play as in the “rich are paying most of the taxes”, (funny how those complaining about how much the rich pay in taxes seem to know what “rich” is) present your candidates as the every-man or every-woman, salt of the earth, blab, blab, blab to reinforce the perception that this is all about constitutional equality and BINGO, you get to convert life from an economy that worked for society to a society that works for an economy. And as presented, once you get beyond “enough”, all you have is to have more:
Wealth confers power beyond its consumption value. This power is economic, social, and political. The economic power of the rich derives primarily from their ability to use their wealth to invest in enterprises that employ thousands of people and can dominate large sectors of the economy.
Yes, they are talking wealth. However, as I noted, this is after the rich bought their stuff to make them happy. Now they are just accumulating power.
We need to define “rich”. We need to be adult about this and take the responsibility for understanding the interplay of society and an economy within our form of democratic governance. Personally, I think we will find that defining rich for our purposes is rather easy once we stop answering the rhetorical dare of: Define rich?
For this discussion “rich” is a life classification. The classification is consumption determined, the amount of which is a function of energy expended (ie: physical labor/intellectual labor), work performed (ie: blue collar/white collar) along with energy conserved (freedom), work diverted (power). This aspect of life is not about what the individual finds satisfying. That is another rhetorical trap. We all know of those who are fine with just hitch hiking through the galaxy and would consider them self rich for the memories. The life aspect needed for determining “rich” for the purpose of taxing is the aspect determined by the structure of the society one lives in. For us, that structure is idealized in the phrase: The American Dream. That phrase is the socially understood goal and that phrase is underscored by how much money your hands manage.
Classification as in “class warfare”. Consumption as in “autonomous consumption”. American Dream as in more than autonomous consumption. All three a function of the amount of money managed by one’s hands.
To be continued.