We are told that families earning over $250,000 a year are wealthy. That is, of course, if the family consists of two working adults who happen to be married. If said family simply lives together under the same roof without being married, then they can earn up to $400,000 per year before they join the ranks of the wealthy. Hmmm—something seems very wrong with policy that essentially penalizes people who make the commitment of marriage, which researchers tell us again and again is a significant predictor of positive educational outcomes for the children involved.
Individuals are considered to be wealthy once they earn $200,000, which, coincidentally, is just above the current salary earned by Members of Congress (except for those in leadership positions who earn more). It would be meaningful if congress were asked to vote on legislation that would essentially force them to tax themselves.
I’m not sure how we know who is middle class and who is rich, especially since where one lives and whether or not one is educating children has a significant impact on just how much that $200,000 or $250,000 can buy. Even economists cannot agree on a single definition for middle class. Some say that the upper limits of middle class is a family income of $100,000 per year, while others say that the middle class includes a professional, managerial group of people whose earnings significantly exceed $100,000 per year. Still others say that the dividing line comes between those who earn the majority of their income through work versus those who earn the majority of their income through dividends, investment earnings, and capital gains. So middle class appears to be a definition of convenience, based on whether or not you want to add more people to, or take more people away from, that category.
While I am the first to agree that nobody should pity a $250,000-per-year family, and that life for these families is probably pretty good, it is absurd to assert that everyone in this category is as wealthy as Warren Buffett or Bill Gates. I have nothing against Warren Buffett or Bill Gates, especially since their fortunes came as a result of being smart, working hard, being innovative, being frugal, and perhaps having a little bit of luck. But it is an insult to pretend that there is no difference between those who earn a good salary and those who have billions in the bank. Beyond that, can we please stop maligning the wealthy with intimations that anybody who ever got into this category did it by lying, cheating, stealing, marrying well, or being born into the right family?
Many people in the top 1 percent got there as a result of hard work, personal sacrifice, and some wise decisions along the way. Whether it happens now or a few years from now, upper-income Americans are going to pay more tax. But would it be so hard for us to treat them like decent Americans, thank them for their hard work and generosity, and make them feel like we appreciate what they are doing to help the economy? It is a lie to say that the top 1 percent of earners are not paying their fair share when, in fact, they pay 70 percent of all taxes collected. So while it might be true that they need to pay more tax to get us out of our current budget hole, it might be helpful to avoid the contemptuous tone and suggestions that they are cheating the system or that higher taxes are the punishment they deserve for working hard and being successful. And by the way, when all of us were earning record-setting returns on our investment portfolios, we had very different feelings about the people who today we castigate for their role in the curent economic crisis. We didn’t mind what they were doing when it benefited our own pocketbooks (which didn’t make it right then or now).
I have a brother-in-law who is in the 1-percent category, and he got there by starting and growing a successful plumbing company, which required him to spend many years working for a low wage in the sort of filth that few of us could tolerate. In the early years, he did back-breaking work and came home tired and dirty every night. While we ate Christmas dinner, he ran service calls to unplug clogged drains or unfreeze frozen pipes so that others could enjoy their dinner, too. He was on call day and night, provided free service to those who needed it, and contributed significantly to nonprofit organizations in his community.
As his reputation spread and his business grew, he employed others and for years has provided a good paycheck, health care benefits, and retirement contributions to dozens of employees and their families. He took a risk in his early years to start his own business, and just barely got by on my sister’s earnings as a teacher while he invested his own paycheck back into the business. Through hard and honest work, wise decisions, and a willingness to risk it all in hope that he had what it takes, he has done well for himself and the others he employs. That somehow he should be made to feel that higher taxes are the punishment he deserves for his success, or that he has somehow cheated others through his own success is ridiculous. Higher taxes might be a necessary reality, but it’s the way that many have dishonestly characterized the successful that puts salt into the higher taxpaying wound.
The great thing about America is that any person can do exactly what my brother-in-law did and make a better life for himself and his family. He did not come from a wealthy family, he did not earn a college degree, and for years his teachers said that he would never amount to anything because he had poor grades. Years later, it became obvious that he had dyslexia, which during his school days had not been properly diagnosed or accommodated. When he passed the written exam to become a Master Plumber, even his own mother made some snarky comment about how she had just assumed all along that he was either stupid or retarded (her words, not mine).
Meanwhile, my brother-in-law is one of the most knowledgeable and well-read persons I know. He can talk about a range of topics so diverse that it makes my Ph.D. scientist husband shake his head in awe and admiration. My brother-in-law certainly had no edge, no magic connections, no special opportunity. Instead, he had a work ethic that wouldn’t quit, a wife who believed in him and worked day and night to support the office side of the business, and a skill that has served his community well. Every year for the past decade he has earned the Best Plumber award given out by his local community publisher. He made his money the old fashioned way. He earned it.
So if we are going to take more of his money—at a time when he is putting three kids through college with, of course, no financial assistance for any of them—can we at least not insult him by saying he is no different than Warren Buffett, or that he doesn’t work as hard as those who earn less, or that he hasn’t made a significant personal and financial commitment to the community in which he has raised his children and grown a business? If we are going to take even more of his money, couldn’t we show him just a little bit of respect? Let’s have an honest discussion about taxes, based on the economic facts before us, and without the judgment, posturing, and prose that seems to have dominated this conversation for so many years.