Philosophy Weekend: On Extreme Wealth, Identity and Taxes

Economics Existential Politics

I've never wished for wealth. I hate shopping, luxury is not my idea of pleasure, and I don't enjoy owning a lot of stuff. I've never been able to understand why somebody would get excited about a widescreen TV or a gigantic house or an expensive car. I drive a 2001 Saturn, and I really don't know what a car could have that this one doesn't. I guess the most luxurious thing I own is my Takamine acoustic classical guitar, which I paid a thousand dollars for because I could actually hear the difference.

The only amount of money I'd ever wish for is the amount that would buy me freedom from working for a living. I've spent my adult life earning my monthly keep and supporting my kids with long, hard hours. I've rarely managed to get more than a few months ahead of my bills, and a couple of times I got a few months behind. I did have one extensive flirtation with wealth (this was one of the main subjects of my memoir) during the Internet stock boom in 1999. But a million dollars in stock options didn't buy me any freedom at all. Instead, it shackled me to my job more tightly than I'd ever been shackled before, and the crazy year that followed (before the 2000 stock market crash wiped out my "wealth") was one of the worst years of my life.

So I don't think wealth buys happiness, and nothing I've observed around me has suggested otherwise. But money sure does have a hold on the public imagination, and it sure gets people riled up. The big public debate that's taking place in the United States of America these days about taxes and budget deficits is worth studying from many different angles. As far as the battle in Congress indicates, the Democratic Party wants to cut taxes on lower and middle class Americans but wants the wealthy (those earning above $250,000 a year) to pay more, while the Republican Party wants to extend tax cuts to the wealthy.

It takes some effort to unpack the real agendas behind these stances. Why do the mass of Republican voters care so much about tax cuts for the wealthy, when Republican voters are actually no wealthier than Democratic voters? I've heard it explained that anti-tax conservatives are "voting their dreams" -- they hope to someday become wealthy, and when they finally do they don't want the government taxing their money away. This is the "Joe the Plumber" theory, and I'm sure there's something to it. But it doesn't explain enough.

I think the ideological divisions here are more about identity and trust. If you don't trust your government, and you don't identify with it as representing you, then you will find the idea of enriching it abhorrent. To enrich a government that you don't feel represents you is to give an alien entity greater control of your life. On a personal identity level, on grounds of culture, lifestyle and ideology, many Americans may feel they have more in common with wealthy capitalists than with government bureaucrats. There's the guts of the tax debate: it's less about economics, more about who we each think we are.

Both sides of this debate have been fired up lately. Senator Bernie Sanders of Vermont made a big splash on Friday by delivering a spontaneous, heartfelt mini-filibuster against tax cuts for the wealthy. Like many who watched parts of his long speech, I found his performance thrilling and his words very persuasive. One of his most memorable points involved proposed estate taxes and the Walton family, holders of the Wal-Mart fortune:

Here is the important point I think many people do not know. I have to confess my Republican friends and their pollsters and their language people have done a very good job. This is the so-called death tax. I think all over America people say this is terrible. I have $50,000 in the bank and I want to leave that to my kids and the Government is going to take 55 percent of that, 35 percent of that. What an outrage.

Let us be very clear: This tax applies only -- only -- to the top three-tenths of 1 percent of American families; 99.7 percent of American families will not pay one nickel in an estate tax. This is not a tax on the rich, this is a tax on the very, very, very rich.

If my Republican friends had been successful in doing what they want to do, which is eliminate this estate tax completely, it would have cost our Treasury -- raised the national debt by $1 trillion over a 10-year period. Families such as the Walton family, of Wal-Mart fame, would have received, just this one family, about a $30 billion tax break.

I find it hard to believe when we are talking about massive cuts in programs for working families, when we have this huge national debt, that anybody would be agreeing to lowering the estate tax rate to 35 percent. That is what this agreement does and I think that is a very bad idea.

Bernie Sanders showed much bravery in speaking these words, because it seems almost shocking to single out an American family by name and question their right to keep their own fairly-earned wealth. Anti-tax conservatives often charge that pro-tax liberals are trying to use taxation to engage in "class warfare", and singling out an American family by name might feel like a step in that direction.

But it is also shocking to realize that a single family can hold onto $89 billion dollars in wealth, and we must wonder why it shouldn't be their responsibility to contribute more of this wealth towards paying off the government debt. Is this class warfare? I don't hate the Walton family, and I certainly wouldn't want to punish them. But there's a very good reason why Democratic/liberal economists are calling for holders of extreme wealth in the USA to pay much more taxes: the government is badly in debt, and these individuals are the ones with the money. Seems like a pretty clear case to me.

But, as I mentioned above, debates over taxation are fraught with notions of identity and trust. What are we really talking about when we talk about taxation? Are we on the playing field of economics, or of culture and symbolism, of repression and resentment and control?

The fact that economic forecasters don't predict anything close to a balanced budget under either the Democratic or Republican taxation proposals makes the situation even murkier. The fact that President Barack Obama, widely suspected of being a closet socialist, is actually a closet Taoist wishing to find a perfect balance between both sides of the debate makes it murkier as well.

Meanwhile, I wonder how the members of the Walton family must have reacted when they learned that they'd been singled out by name in Senator Bernie Sanders much-publicized speech. It's strange to consider that this family exists among us. Do they actually live like Richie Rich? Do they regularly give large segments of their wealth away to carefully chosen charities?

I hope so. I can't imagine what else they would want to do with all that money, or how else it could be doing them any good.

This article is part of the series Philosophy Weekend. The next post in the series is Philosophy Weekend: Captain Beefheart's Innocent Soul. The previous post in the series is Philosophy Weekend: The Pointless Rationalism of David Foster Wallace.
5 Responses to "Philosophy Weekend: On Extreme Wealth, Identity and Taxes"

by Dan on

It's easy to understand what the Republican politicians do if you remember this: the Republican party exists to serve the wealthy. Period. Why non-wealthy people become Republicans and support their schemes is less obvious. I agree that they plan to be wealthy some day and want to get all these breaks and privileges. Also there is an element of religion to Republicanism, which helps explain everything from Reagan to Palin. Anything else?

by Ed on

The Bernie Sanders quote is a bit misleading without context -- "Let us be very clear: This tax applies only -- only -- to the top three-tenths of 1 percent of American families; 99.7 percent of American families will not pay one nickel in an estate tax. This is not a tax on the rich, this is a tax on the very, very, very rich."

This is true of Sanders' own proposed estate tax, not of the estate tax as it's been implemented in the past, and likely not of any estate tax that will be implemented in the future.

I say let the Bush tax cuts run out. I was never for them, and they didn't do any good, except to make the rich even richer. The only group that gained in the '00s were the ultra rich. Everybody needs to pony up at this point.

I also say no talk about gutting Social Security and Medicare with talking about gutting defense. Why should the US be the cop of the world while the middle class vanishes and the poor seek deeper into poverty?

The group that wants to change Social Security are also the ones behind the financial crisis that wiped out a lot of people's 401k and IRA accounts - this was supposed to be the middle class answer to dependance on Social Security. If the Republicans get their way, we will have neither.

Why should we go deeper into debt at this point? The Republicans are already ready to dismantle the Health Care Law, which although flawed is at least a glimmer of hope for most of us. The American people are getting screwed over to an extent that I never thought possible.

Look at the people that make the laws. They have the best socialized medicine in the world, which doesn't go away if they lose their jobs or retire. Plus, they have a retirement plan that is not linked to Social Security, and which is much more generous than anything Social Security could offer.

Think about it - what do they care if Social Security or Medicare go away? They are covered. These are things that are paid for partially by everone who works for a living - just look at your paycheck and see what is deducted every week. As far as I can tell the funds for these so called entitlements - damn right I'm entitled to it, because I paid into it - are looked at by Republicans as giant piggy banks that they can't wait to get their hands on.

The Republicans are supposed to be for the most part Christians. What happened to taking care of the poor? What happened to a camel has a better chance of passing through the eye of a needle than a rich man has to get into heaven?

This stuff (social programs, etc) is not something that should be bartered away to gain momentary political leverage. Where is the outrage, or rather why did the outrage jump into bed with the right wing? To paraphrase Ben Franklin - we need to all hang together or we will all starve seperately.

by Mayowa on

Excellent stuff as always Levi.

We have very similar ideas of how much wealth we need in our lives. I want to be able to write for a living and still take care of my family is all....we dream on.

I am not sure why a lot of poor, less educated folks vote in ways that benefit the economic upper crust but i'll say this:

- It wasn't always that way. There was a time when the tax rate was much higher on the wealthy in this country (Long before the Reagan years) and everyone was fine with that. It took concerted effort by the wealthy to change the public perception towards trickle down economics.

- The coalition of the wealthy, economic republicans with poorer, morally inclined ones and the continuity of that coalition despite the harm to the poorer half is one of the greatest achievements of our time. There is no better way to keep the oppressed in line than to convince them they are free.

It's all a little conspiracy theory, I admit. But the evidence of a concerted effort is clear (the most recent example being the piece about the Koch brothers in the New Yorker).

by Peter on

"How many things there are in this world I do not want.
Said Socrates, strolling through a marketplace in Athens."

-- Vanishing Point, David Markson

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