Watching the Democratic Debate the other night left me with the strong suspicion that it isn’t just Washington and politicians living in a bubble…It appears the mainstream media is living right in there with them.
I mean, it can’t be just me, can it? Who the hell really thinks that $200.000 -$250,000 a year equates to middle class? Where in the US does raising the cap on payroll taxes affect teachers, policemen or firemen? Have these folks even looked at the mean wage scale in this country? I know all those CEO perks and “Star Media” contracts raise the average, but they don’t affect the mean one bit…
The mean annual wage in the US is $39,190. That is your middle class. Even taking everyone in the rage from 40 – 60% won’t git you to the numbers the candidates and talking heads keep mentioning. The mean annual wage for patrol officers…$48,410. Firefighters…$42,370. Elementary school teachers…$48,700. Where do any of these professions pay over $100,000 to any but a select few? Even in New York City the means are below that. The mean annual wage for everyone in NYC is $48,980. Police Detectives…$68,830. Fire Inspectors…$50,520. Elementary school teachers…$70,910.
I guess the perspective from the upper reaches of the income slope is different, there is always somebody making more money (usually much more, unless you are Buffett or Gates). But from my position on the slope, having someone who makes millions each year talking about the middle class is pretty “elitist” no matter who they are…Politician or “Journalist”. And to be wining about being asked to pay the same percentage of payroll taxes that the majority of the rest of us do…Get over it…both of you.
Source: May 2006 National Occupational Employment and Wage Estimates
This is really a pet-peeve of mine. If you are in the top 1% of the income distribution, then you can still feel just “middle-class” if you live in NYC or Boston or San Francisco, etc. Many of us are subjected to Federal, State, and Local taxes, very high property taxes, Alternative Minimum Tax, and the loss of any government subsidies targeted to national average numbers like the ones you cite.
The socialist progressive tax system that is currently in place in America combined with the crooked AMT does not allow many to pay the same share of taxes as everyone else, rather it penalizes the most productive citizens.
Lastly, it should be noted that most of the “upper-class” incomes are attributed to education, wages deferred, and performance. So, if you invest $200K in your education, and you forego any earnings while you are in school, then you would hope to earn far above the average in order to compensate you for your time and money outlaid. Not everyone who receives higher ed will come out ahead, and this is precisely why it is a bad idea to subsidize education for everyone regardless of performance such as Clinton tried to do.
America once went to war over the idea of unrepresented taxation, and I think that many of our current taxes are un-Constitutional in that they have outlived and outgrown the intent of their original mandate.
Jim, forgive the crocodile tears. I am sorry, but a yearly income that starts at $250K and a net worth of over $1,000,000 doesn’t leave me sympathetic to your argument. If you are in that class and don’t like your local taxes you can always do what those in the lower quintile can’t…Move somewhere with lower taxes.
You don’t like progressive taxes, do you have a better idea? Keeping in mind that the money to keep the infrastructure and essential services running has to come from somewhere, how would you pay for it?
And as for your last point…I fail to see it. Most (as in all but the 1%), never see that $250,000 per year. Even after paying for the education and preforming at the top of their game for their entire lives. Seems to me if you were able to pay $200k for your college education, you started in that upper 1% anyway. Since education is supposed to be the best way to get ahead in America, shouldn’t we be doing everything we can to allow more people to get ahead?
Personally, I pay my taxes for the priviledge of living in this great country. I have never understood those who felt entitled not to and looked for ways to get out of it.
Your comment about going to war over unrepresented taxation is amazing since the majority of our national representatives are of the class we are discussing. All of our Presidential candidates from both parties had household incomes in excess of $4 million last year alone. The Senate has always been a millionaires club and it’s getting to the point where the House is just as bad. If you can’t convince them that it’s in there own best interest, than I guess I’ll keep my faith in this countries future for a while longer…
Jim, I have an innate inability to understand your mindset but keep coming by…We’ll discuss it.
Thanks for the response Gary. It seems intuitive that if you believe in maximizing the pursuit of happiness, then you desire a minimum of intervention. If a rising tide lifts all boats and intelligent economic growth is a major goal, then the government should find ways to incent profitable ideas, rather than only concern itself with maximizing collection of revenues and distributing these revenues corruptly and inefficiently.
How should revenues be distributed? Like it or not, profits should and do allocate resources.
Taxes:
I’m NOT an expert, but I think I would like some form of a flat tax, similar to the Negative Income Tax that Milton Friedman proposed, with some adjustments that discourage unemployment for those receiving welfare. Possibly combining this with a form of consumption tax would incent savings and shift the burden of taxes to the greatest users of resources.
“Seems to me if you were able to pay $200k for your college education, you started in that upper 1% anyway.”
Not necessary in America. This country has an extensive credit market allowing borrowers from all backgrounds to get educational loans with the expectation that future wages will be larger than the cost of the loan. This allows the brightest and hardest working individuals to contribute to our economy and forms a meritocracy at the same time.
$200K sounds high but look at this way: If you spend $25K/year on college, that’s $100K for an undergraduate degree. If you gave up a job that paid $25K/year in exchange for college, then your opportunity cost is $200K. Obviously, graduate school adds to this example. Some private schools charge over $40K/year.
“Since education is supposed to be the best way to get ahead in America, shouldn’t we be doing everything we can to allow more people to get ahead? ”
I think we do already. We have implemented mandatory public funded education through high school. The brightest and hardest working are primed for higher ed, but poor performers would do better to enter the labor force and earn wages than to get into debt and only fail in college. If we could magically find a way to make all people more productive to the point of outweighing the costs, then yes, that subsidy should be provided.
I just wanted to give 2 examples of “rogue” taxes: 1. The Death Tax was implemented in the early 1900’s solely to fund our WWI outlays with the expectation of its elimination after the war. Of course, government got used to the revenue and never revoked it. 2. The AMT was designed decades ago to capture revenue from the wealthy that used tax loopholes to escape conventional taxes. The government never revised the income targets defining the “wealthy” and thus with inflation, much of today’s middle class is paying a tax never meant for them.
As for moving to lower tax regions, this is an increasing phenomena. More and more Americans are even moving abroad to lower their taxes. I don’t have all the answers, but I have spotted some of the problems, one of which our current approach to income redistribution.
Thanks for posting my thoughts.