Saturday, May 1, 2010

Proportionate to Earnings

People treat wealth as a matter of fact, as if it is just a state of nature; you are born either a cat or a dog. They refer to the 'wealthy' as some privileged class as if those people took no action on their part to earn that status (I am not referring to the wealthy who were born wealthy, but those who get regarded as wealthy through the tax code - those earning high salaries). Consequently, the populist masses who are not in the same situation, despise these people. They want for them to pay higher taxes and complain that even the high progressive tax system of the US is not enough. It is obvious these populists want the 'elite' to earn the same salaries as them, even though it is likely their education, experience, position, and hard work to get there is the cause of this discrepancy in earnings.

America, once regarded as the land of opportunity, meant that if you wanted to have a better life, own a nice home, go on more vacations and have more toys, you could work to attain it. The system is not entirely defunct, but the treatment towards people who make it is viewed negatively and punished through the tax code. Those who have not achieved this elite status take comfort in their friends who are in the same situation and readily complain of those wealthy people who are taking advantage of them or have it so easy, how ever they justify such conclusions. If any of them defect and make it to a higher status, their old friends can no longer sympathize with them and secretly despise their new found status. It's like the old saying goes, misery loves company.

Populists complain that paying X amount of dollars for a product or tax is a higher percentage of their income and it is not fair that a 'wealthy' person pays the same amount and it is such a smaller percentage of their income. But obviously, isn't that the whole point of working hard to become 'wealthy'...? So that the relative cost of products or taxes is not as taxing on one's finances? These populists want to undermine the whole point of striving to earn more so that one can afford more. Otherwise, why bother getting a better paying career if the relative burden of things is going to stay the same?

Take downtown parking for example. I am not aware of a downtown city where it is not expensive to have the wonderful privilege of leaving one's car on the street. Populists will complain that it is unfair to them because only well off people can afford it. But there is only a limited number of spaces, and they have to be rationed somehow! The capitalist system is very efficient for problems like this, and the cities benefit greatly from those high parking fees. I would suspect their solution would be some sort of price discrimination, like everything else going back to the previous paragraph, but so far they have not offered a solution to the problem where costs would not be raised overall. As an aside, why encourage more auto use if there is already an over saturation? When some people cannot afford something, it encourages a cheaper option like mass transit.

For populists, the new American ideology is not about attaining a higher status, but about depressing the status of others.

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