A serial journal of cogent reflections and irreverent insights on the social effects of capitalism and the roots of partisan politics. Pairing prose with HDR photography and “flash points” drawn from current and historical perspectives, the author seeks to recover lost wisdom and courageous action beyond the shouting and noise of today's headlines.
Chapter Thirteen, Part Two
My Own Little Tea Party II
Talking about the Concentration of Wealth
Time Range: Present Times
The issue of taxes appears to be quite a touchy subject. The people at my party feel they have good reason to be concerned. They made extraordinary gains regarding cutting their tax burdens over the past half-century. As recently as 1960, the top bracket for the very wealthy was 91%. Even in the 1970s, the top bracket was 70%. With rates like that, it was necessary to pay accounting professionals to find every possible loophole, even if it meant paying lobbyists in Washington to create them.
In comparison with these past rates, the Buffett Rule, recently championed by President Obama, is relatively meek. It would affect approximately 450,000 households (1%) who earn at least $1 million. Under the rule, they would pay an effective tax rate of at least 30%, almost double what Buffett and presidential candidate Mitt Romney paid in taxes, but still less than the 35% paid by Buffett’s secretary. And some analysts have taken it even further.
Robert Reich writes that Yale professors Bruce Ackerman and Anne Alstott have proposed a 2% surtax on the wealthy. This would be for the richest one-half of 1% of Americans who have more than $7.2 million of assets. They estimate that the tax would generate approximately $70 billion a year, or nearly $750 billion over the decade. This is equivalent to about 50% of the savings that the unsuccessful Super Committee of Congress had sought as a goal for reducing the deficit. (source)
Some at my party are becoming quite agitated. What about all those people who pay no federal taxes? One man in particular is incensed by the fact that the bottom 50% of the nation, whose collective assets are roughly equal to those of the 400 people drinking Earl Grey tea with me, pay no federal taxes. How dare they? Some of those sympathetic to Buffett’s way of thinking argue that it’s because this group has no money, but to others at the party, this still sounds like a free ride, and it makes them upset. “The poor need to find themselves jobs, and they need to share some of the responsibility,” grouses one.
An argument ensues, with one person from the Buffett side saying that the half who pay no federal income tax do pay sales taxes, federal payroll taxes, state and local taxes, and — if they own a home — property taxes. And the total of those taxes can actually be more than what the very wealthy pay on a percentage basis. “Bull” is the response, and “That’s pathetic,” says another. “What about the 50% of us who do all the heavy lifting in this country and foot all the bills?” says a third. A fourth says we need to cut spending and broaden the tax base so that there is not an unfair tax burden on the shrinking minority who are taxed. I offer everyone cookies, but the party spirit has dissipated, and some look like they will be going home early.
I end up talking with one of the staff catering the party. She is 62 years old and has been in the food services business for 35 years.** She has no medical insurance and not enough savings to retire on. She had not anticipated working into her 60s, but she is not alone in having to change her plans. She tells me that she was recently at a workforce center in her town and was struck by how many older workers seemed lost and bewildered. And she has had to emotionally support her daughter, who lost a well-paying job at a pharmaceutical company when it was bought up by a larger corporation.
“Things are what they are,” she says with a mixture of resignation and resolve. She notes that even having an education is no security. She has a master’s degree. What she won’t accept, however, is a lack of respect. Her last job offer, a catering position at an upscale yacht club, was actually for a position she previously held but had to reapply for after they went through a restructuring. The new job offer came with a provision that she would accept a pay cut to minimum wage and have 40% of the staff’s catering tips taken off the top for management. Meanwhile, customers would be asked to pay a “service charge” of 20%, up from 18%. She refused the offer but then was denied unemployment benefits. “What did you do?” I asked. “Found a lawyer.” Sometimes our patience just runs thin.
* Based on industrial companies with about $500 million in sales. Source: “Effects of Excessive CEO Pay on US Society,” Towers Perrin & Finfacts.
**Based loosely on the article “After a Lifetime of Hard Work, the Indignity of a Layoff,” Huffington Post, March 24, 2012.
Glad to Pay Uncle Sam
“They’re rich. They’re angry. And they want to pony up more money to Uncle Sam.
Armed with placards reading ‘Please Raise Our Taxes’ and colorful budget charts, about 75 well-dressed middle-aged folks assembled on the steps of San Francisco City Hall at noon on Tuesday — tax day.
'Like millions of Americans, today was not fun — it was more like a root canal,’ said real estate developer John Stewart. … ‘But I was the beneficiary of Bush-era tax cuts that put more bucks in my pocket.’
'Those cuts for wealthy people caused today’s deficit', he said. That’s why his group, which identifies as ‘5 percenters, not 1 percenters,’ seeks tax increases for themselves and other top earners.”
~ Carolyn Said, San Francisco Chronicle, April 18, 2012
Featured in the New Yorker: Super-Rich Irony. The real meeting of the .01 percent at the Belagio in Las Vegas, Nevada
Next Week: Chapter Fourteen: Moving From Duality to Wisdom, Part One
“There is so little of the world that we are able to take in without cognitive dissonance,” writes colleague Elizabeth Doty, “our blind spots are so big, and our worldviews so often fragile.”
How might we then proceed? How might we begin to navigate beyond our small islands of understanding toward something larger and genuinely collective? If we are to do so, we will need to strengthen capacities for tolerating ambiguity and paradox while still embracing action.
We will need to draw on wisdom traditions and spiritual knowledge without negating the impact of history, social institutions, economic arrangements, or the value of the individual. In other words, we will require a capacity to hold opposites together personally and in our social interactions to such a degree, and with such fierce intent, that something new is born.