I am not rich and probably won’t ever get rich, but I hope that you do. I hope that a lot of you get rich.
I hope that your hard work and willingness to take risks pays off handsomely because that means that you are generating economic activity. Economic activity is good for all of us, even those that are not rich.
That is why wealth envy is bad. Economic inequality is not an issue. We the People should not focus on economic “inequality.” In fact, economic inequality is a good thing.
But not according to Treasury Secretary Timothy Geithner. Geithner told an audience at the Center for American Progress that “America is a less equal country today than it was ten years ago.”
I, and many people like me, have worked hard in life to get a good education and keep our knowledge current. I work hard to perform my job well. At the same time, I have maintained a large involvement with my family. There are others that I know that have worked far harder than me and have, therefore, reaped greater economic rewards. Good for them. Many of them have chosen to make the kind of sacrifices that I chose not to make. They made the sacrifices for money. That was their choice. One of the great things about America is that we have choices like this. If money is your priority you can work for it every waking moment. If family is more of a priority, you can apply more balance to your life. Just understand that with these decisions come benefits and sacrifices.
There are, however, real issues in our economy – inequality is not one of them.
Geithner pointed out that, “One in eight Americans is on food stamps today.” That is an issue. Some 47% of American households do not pay taxes. That is also an issue. Both of these issues need to be addressed. Perhaps a little more inequality could create opportunities for these people.
The focus on economic inequality by Geithner and others takes the focus off real issues like burdensome taxes and regulations. Why should I care if the other guy makes twice as much as me, or a thousand times as much, as long as I earn enough to live a good life? The wording of Geithner’s comment promotes wealth envy and is used as a sleazy effort at vote buying from the masses. The real issue is that some people are either unable or unwilling to earn a living. That is a different issue and confusing economic inequality with the ability and willingness to earn a living makes the real issue worse.
Geithner and others concerned with economic inequality are wrong and their error hurts the people they claim to want to help.
Further, it was Geithner who failed to pay a large sum that he owed in taxes until he was nominated for the job at Treasury. Geithner was not fined for this lapse. Talk about America being “less equal,” let’s see some someone not of the political class pull a stunt like that and get away with it the way Geithner did.
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Inequality (and here I think you mean income disparity) isn’t the problem per se, it’s more like a symptom. If CEO X gets paid 20 million a year to build a company, pay lots of workers, generate economic activity, fine. If the CEO Y gets paid that much to lay off workers, run the company into the ground and retire to the Caymans, that’s a problem. At this point, the incentives seem to be running as much toward the Y model as the X–big problem. What if Y took a 50% pay cut and used that 10 million to keep from laying off workers? The company’s profits could stay the same but these workers would have more money to buy the company’s product, right? That’s the reality that income disparity seems to reflect–management making decisions in their personal best interest but not in the long-term best interest of their companies.
And as you well know everyone pays taxes. If 47% don’t pay income tax, all employed people pay either payroll or self-employment taxes, and eveyone who shops pays sales tax. Maybe there are a few hermits out there living off snared rabbits and wild tubers. By the way, if we look at percentage of untaxed income, I wonder who pays the least? Bet it’s not the poor.