Americans Do Care About Inequality!

It’s very tiring to hear politicians on the right (some even on the left) say, “Americans don’t care about inequality. They only care about opportunity.”

The implication is that we should celebrate being a country where one can achieve great wealth, and we don’t want to do anything to disturb that opportunity–just try to create more of that, so anyone can “make it big.” Certainly don’t tax the wealthy more. That might reduce their incentive to keep creating jobs, And, I’m planning to be wealthy someday, so I don’t want to create obstacles that would further tax me at that time.

It turns out this is a popular theme, since Americans have a long standing commitment to independence–the idea that anyone can make it on his own if he just works hard enough. The last place we want help from is the government, which is far too wasteful and inefficient. So, we’re headed the other direction–tax the rich less and reduce government more.

But there are serious problems with this set of beliefs. First, studies show that mobility has declined dramatically in parallel to the increase in inequality, all since Reagan.

And, there are many of us who do care about inequality. Why do we care? If everything was gained not only legally, but also fairly, the problem would be smaller. There would still be a worthy debate, but it would be constrained to considerations associated with the differing natural genetic inheritance of citizens and the differences in the households into which they were born (wealthy or poor, educated or not, etc.). This would still leave a lot of room for diagreeemnt as to whether or not it is fair for someone with good genetic inheritance and/or the benefits of privileged birth and upbringing to succeed highly, vs. the lesser opportunity of those without such advantages.

But there is more. There is the question of the fairness of our system. Examples:

What about the hundreds (or thousands) of loopholes and deductions that have been granted certain businesses and individuals in our complex tax code, not reduced much in the newly approved tax plan? The shareholders and executives of such companies benefit enormously from these protections, at the expense of the rest of us, who must pay more to make up for those losses.

Then, there are industries which are subsided by the government, either with direct payments to keep them afloat or with any variety of export or import quotas or tax protections to protect them. Who makes those decisions? Are these decisions fair to taxpayers like me?

Carried interest deductions for hedge fund managers. Even Republicans refuse to defend this, but continued it in the new legislation.

What about corporate executives like John Stumpf of Wells Fargo, who get paid $23 million, while the company is spiraling into multiple frauds and regulatory failure?.

Warren Buffet, one of the richest in the world, admitted he pays a lower percentage of tax than his secretary. No one really thinks this is fair. Mitt Romney was found to be in the same situation when he ran for President. Both are lawful, no one can blame them for taking advantage of the legal loopholes, but it isn’t fair.

What about President Trump, who launched many businesses that failed, leaving stockholders, banks, vendors and workers with the losses, because he did not guarantee the debt? Legal, but unfair.

So, how do you feel when you walk through the Business Class section of the airplane on your way to crowded and uncomfortable coach seating, while privileged customers are sipping their free champagne? Do you have any moment of wondering how their wealth was obtained, whether every one of them gained it fairly, or without privilege of birth?

I venture to suggest that most of us do have such moments, considering that there is so much opportunity for wealth interests (corporate and individual) to influence legislation with unlimited advertising, lobbying, and tax free “think tanks” creating justification for legislators who cater more to the wealthy of their constituents than to the poor.

Inequality matters.

We need to provide a great deal more transparency about the legislative and taxing decisions–who is benefited and why? And, we need to make a commitment to fairness in such decisions.

Legality is not the ultimate determinant of fairness.

I don’t like to hear that the American people don’t care about inequality. Who asked me? I care.

 

 

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