There is a lot of talk these days about how awful the top 1% income earners are. What about those of who just make an average to upper-middle-class income? Do these protesters want to take our money, too? Or are they in fact, already taking it?
And you would be right. But that might not be as illuminating a statistic as you'd like to think.
But what about the middle class? We get the short end of the stick in these discussions. While it is true the rich pay a lot of taxes and are in the highest income brackets, folks making $50,000 to $100,000 a year in this country (the 50% percentile to about the 83% percentile) end up paying a lot of taxes, particularly in proportion to disposable income.
Yea, that's right. You make double the mean salary in this country and that puts you in the top 83%. Still feel like you want to go after those "rich dudes" who are "making all that money"?
Those hippies are not your friends - the people they are protesting against are YOU.
If you are making a decent income, say $75,000 a year, you are hardly "rich" in this country (but you are in the 72% percentile, you vile rotten rich bastard!). But you are now in the 25% marginal tax bracket, and also paying Social Security and Medicare taxes on your full income - unlike the guy making over $108,000, who is past the Social Security cutoff. Or the guy making $25,000 a year, who is in the 15% bracket (and likely paying no Federal taxes, with deductions, and probably qualifying for food stamps and Section-8 housing).
And if you live in one of those welfare-state States (which can be summarized as any State whose name appears on a deposit can or bottle), your property taxes may be through the roof - $5000 or more, perhaps $10,000. And let's not forget that 8.5% sales tax on everything you own.
Still convinced that "redistributing the wealth" is a good idea? The government is already doing a pretty good job of redistributing YOUR wealth, if you live in one of those States!
While you are doing 'OK' financially, and a little better than the median income taxpayer, the burden of taxes on you is very high, relative to your modest income level, and collectively, your income segment pays a lot in terms of taxes.
And where does this money go? Well, most Federal taxes go to pay Social Security, Medicare, Defense, and Welfare. Your property taxes pay for schools, roads, police, fire, and again, more welfare. While you may see some of this money back - particularly in the form of Social Security - the public assistance, unemployment, and the like is something you will likely never see a penny of.
The "OWS" Protesters try to play a class-warfare game, asserting that it is the "1%" versus the "99%" or the "rest of us" - but I ain't buying it. I am not one of the "rest of us" - or at least I don't lump myself into a group that includes patchouli-stink hippies named "Rainbow" and "Ketchup".
I have as little in common with a person on welfare as I have with someone making a Billion dollars. The only difference is, the guy making a Billion dollars isn't spending my money. The guy on welfare, is. The guy on welfare is jacking my taxes through the roof, not the guy making a Billion.
And that kindly old teacher down the street? The one that belongs to the Union and makes $100,000 a year teaching 3-grade? Yea, she is jacking my taxes through the roof, utterly! (Here on Retirement Island, most of the folks here are retired New York School teachers and they get new cars every couple of years - retiring on 90% of their last year's salary!). And ironically, the States with the highest per-capita school expenditures have some of the lowest test scores. Funny how that works - when you make teaching a Union job.
There is a lot of Socialist talk going around these days about "sharing the wealth" - as if wealth were a pie and that government should be slicing it up in bite-sized pieces for people. History has shown that this model is not only inaccurate, but dangerous. A country that engages in this "redistribution of wealth" scheme inevitably goes downhill, and rather rapidly.
MSNBC recently did a piece on which States are doing "the best job" in redistributing the wealth. For the most part, these are States with very high taxes and very high costs of living - the soda-can States. Why? Because they do such a good job of creating an attractive environment for welfare recipients, that many move there, increasing the tax burden on the remainder, who then leave (and their companies leave), making the tax burden even higher.
Creating a welfare State is not the answer. Once you reach a certain tipping point, people just give up, stop working, and figure out how to scam the system, instead of working. It brings an economy DOWN, not up.
And this sort of talk seems to be gaining traction, particularly in the media.
On American Public Media's Marketplace this evening, an alleged "economist" argues that the Government should extend unemployment benefits so that people will spend more and get the economy going.
Let's see, print more money so people buy more crap from China. Yea, that should work. No really, the point of the piece was that the unemployed spend their money at the Dollar Store and other discount outlets, and this is 'good for business' - I kid you not! Here's a clue: Never take financial advice from the IHS Global Insight crowd. They have their head up their ass.
The couple profiled in that piece are an unemployed teacher and an unemployed retail manager in Oregon. They are getting $400 a week, each, in unemployment. That's a combined income of $41,600 a year, even if it is taxable, is a good income - very close to the median income in this country! If they can't live on that, they aren't trying very hard.
Funny thing, but I bet neither has thought about moving to places where there are more jobs, or perhaps taking a job that pays less than, or close to, what unemployment makes. This is simple economics. If I give you $10 not to work, you won't work for $8.
The more you pay people not to work, the more they won't work - it is axiomatic. Once that unemployment or welfare runs out, suddenly, jobs that people turned down before, look attractive.
The scary thing today is that people are willing to believe that we can just print more money and put more people "on the dole" and it will fix everything.
And I think this sort of talk plays right into the hands of the GOP. President Gingrich is starting to look more and more plausible.
