The Fury of the Idle Rich

I was idling away a bit of time on FaceBook to see what people were posting, and I came across this gem. This is the kind of thing that conservatives use to justify taking positions on social issues that concern them. At first blush it seems quite reasonable, but look a little closer and you can see the flaws in the argument quite easily.

It revolves around taxes and it goes something like this. Ten men go drinking in a bar. The bar tab is usually $100 per day. Since they are good customers, the barkeeper decides to reduce their bill to $80 each day. If they paid their bar tab the way they paid taxes, this is how it plays out.

Person $100 Bar Tab $80 Bar Tab Saving
First 4 men $0.00 $0.00 0%
5th man $1.00 $0.00 100%
6th man $3.00 $2.00 33%
7th man $7.00 $5.00 28%
8th man $12.00 $9.00 25%
9th man $18.00 $14.00 22%
10th man $59.00 $49.00 16%

The idea is that once outside the restaurant, the men who paid in least, receive very little of the savings and become resentful of the man at the top, who gains $10/day. They begin to complain that the wealthy receive all the breaks. The nine men who received least beat up the tenth man. When they next visit the bar, they can no longer afford the bar tab because the  wealthiest man is no longer there.

This leads us to believe that we ought to be thankful for the wealthy who pay so much more than we do in taxes. If we target them, they may not show up any more, and may move elsewhere.

This is how the wealthy, and their conservative allies paint their picture. The problem with glib portraits like this is that it does not portray the world in which people actually live each day. Let me take a close look at this scenario.

The first four men come from an under-privileged background. They went to school in a building in which there was no heat, or air conditioning. Drug dealers plied their trade in the school corridors. They had no science teacher because the last one was stabbed by a student. The math teacher drinks steadily throughout the day, and bought his teaching diploma on the black market. The gym teacher is the pimp for many of the girls in the school. At least sixty percent of the students drop out of school before they graduate.

The first of the poor has just been released from the state penitentiary for drug possession. He was sixteen when he was arrested for having two ounces of marijuana. He can no longer find employment because he has a criminal record. Obscenely Wealthy Man Ten gives him work cleaning his rest rooms. He gets $5/hr. He has no prospects for advancement, and will always be poor. His intelligence has been tested in the top two percent of the population. He cannot afford to pay the bar tab.

The second of the poor lives with his grandmother. She has Alzheimer’s. She also has no way to support herself, and her savings ran out years ago. Man Two tries to support her by doing yard work for Obscenely Wealthy Man Ten. He gets paid $5.25/hr. He cannot take extra work because he has to look after his grandmother who might wander off on her own. The state budget has been cut because of tax cuts benefiting the wealthy, so the state no longer offers universal health coverage. Poor Man Two has to cover her medical bills.

Poor Man Three works three jobs. During the day he works in a pizza parlor, at night he is a security guard and on weekends he does part time work as a telemarketer. The project in which he lives has no police presence because the state budget was cut and the local constabulary is afraid of going into the area. He has to pay protection money to the local gangster chief to prevent being assaulted by the gangsters thugs. His total wages amount to $12.50/hr.

Poor Man Four did military service in Iraq and Afghanistan. He saw three of his friends perish when an IED destroyed their Humvee. He was discharged with severe PTSD. The VA budget was cut and cannot afford to treat him, as a result he lives on the street and cannot find a job. He will commit suicide in three months time.

Middle Class Woman Five wanted to become a marine biologist, but she cannot afford the tuition at her state university. The state budget no longer funds the university and tuition costs rose 75%. She works as a secretary for Rich Man Ten. He pays her $15/hr. She will soon lose her job.

Middle Class Woman Six is a teacher. She has two degrees in higher education, including a Masters in School Administration. She earns $24/hr after thirty years which is 72% of what her male associates earn, because she is female.

Middle Class Man Seven is a programmer. He also has thirty years experience. He is an immigrant who is in the country on a work visa. As a worker, he pays into Social Security and Medicare, but cannot claim anything when he retires because he is not a resident. Obscenely Wealthy Man Ten pays him $40/hr, half of what a local programmer is paid. His ideas for a new software product increases revenue for Obscenely Wealthy Man Ten by twenty percent, for which he gets a $1000 bonus.

Upper Middle Class Man Eight runs the IT department for Obscenely Wealthy Man Ten. He gets paid $90/hr. He has two degrees including a Masters in Computer Technology, and still owes $75k in student bills. He is about to lose his job.

Rich Man Nine also works for Obscenely Wealthy Man Ten. He is twenty-four. He got his job because his father plays golf with Obscenely Wealthy Man Ten. He got the job over Upper Middle Class Man Eight who has waited for ten years to get the position.

Obscenely Wealthy Man Ten started his business with a $43 million tax deductible gift from his father. He got to go to Harvard University because his father was an alum and paid for a new laboratory for the university. He is an average student who scored in the middle tier on his SATS despite having Middle Class Woman Six as his tutor. She was paid $8/hr by his father. He claims that he is a self made man, that he made all his money on his own,despite the 1,200 people that work hard for him every day. He is paid $12 million a year, or $6250/hr, by his board of directors, all of whom were appointed by himself.

Obscenely Wealthy Man Ten decides that, despite making healthy profits, he wants more. He decides to ship his company to China.

Middle Class Woman Five will be retrenched and be escorted to the front door by two security guards. She will not have time to take her personal possessions from the office. She will receive two months salary as a retrenchment package.

Middle Class Man Seven will be forced to train his replacement, a programmer from India that will be paid $20/hr. His visa will run out and he will not be able to work legally. He will get legal status after marrying a citizen, but cannot get a job because his skills are no longer current.

Upper Middle Class Man Eight is retrenched, but he has a pension from the company and should have a relatively decent retirement. He decides to take a vacation.

Poor Man One and Two are fired by Obscenely Wealthy Man Ten and replaced by undocumented workers that will work for $2.50/hr. Poor Man One will be shot in an alley one evening by members of the local drug gang.

Obscenely Wealthy Man Ten lobbies his congressman and senator for more tax breaks for himself and his company. He also finances their political campaigns and ensures that the congressman’s district was gerrymandered, allowing him to win his seat. The two politicians manage to get a twenty percent tax cut through Congress.

This is what happens once the tax cut passes into law. The Treasury no longer receives the revenue that it received before.

Middle Class Woman Six will be laid off since the state is receiving less revenue after the tax cuts. Her unemployment insurance, which she has paid for thirty years will run out after 99 weeks. She cannot find another teaching job because teachers are being laid off across the state.

The first seven people in our list above can no longer afford to buy the products produced by the company owned by Obscenely Wealthy Man Ten. The company, once profitable, starts to lose money, and finally files for bankruptcy protection.

Upper Middle Class Man Eight loses his pension and ends up in a shelter for the elderly. Funding for the shelter has to come from private donors because the state no longer has revenue to subsidize the shelter.

There is a solution for all this hardship, and it is quite simple. The minimum wage should be raised to $10/hr. This would allow Poor Man One and Two to pay more into Social Security and medicare and pay a little tax. Middle Class Woman Five could be paid $20/hr, which would allow her to buy a home instead of renting, which means she would pay Property Tax. Middle Class Woman Six gets a raise in salary to $33/hr, putting her on the same wage as her male associates.

Instead of outsourcing the company to China, Obscenely Wealthy Man Ten keeps the company in the country, and pays Middle Class Man Seven 5% profit for his software invention, which brings him $200k/yr. Upper Middle Class Man Eight is promoted to CFO and gets to keep his pension. Rich Man Nine is fired because of his incompetence and will live off his fathers money.

Obscenely Wealthy Man Ten agrees to a cut in pay, and gives health insurance to all his employees. Poor Man Two can now move his mother to a home where she will be well cared for.

Obscenely Wealthy Mans company thrives because people can now afford to buy his widgets, the state receives more revenue, which allows them to build new schools and roads, and hire more teachers. Middle Class Woman Six becomes head of department in a new school.

You cannot ask the poor to pay more when the wealthy are taking more than their fair share. The burden cannot be placed on those that are least able to afford it. When the wealthy play by the rules and ensure that we live in an equitable society where anyone can become successful, everyone benefits.

The wealthy should not be asked to pay more in tax, they should be told to pay a lot more than they do. As for them leaving the country, laws should be put in place to ensure that they pay taxes to the country that made them wealthy for at least ten years after they leave the country. Tax treaties should be in place between countries that would ensure that this does happen.

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