Rather than ask who the wealthy are who are "scandalously cheating the
rest of us of our savings..." (a point I am sure is taken from like
minded class warfare advocate Senator Bernie Sanders who points out that
the top 1 percent of all income earners in the U.S. made 23 percent of
all income in 2007), let's let the facts speak for themselves. What is
missing is the rest of the story. That same top 1 percent paid
approximately 38 percent of all taxes in the U.S. in 2008. Oh, and by
the way, just to further put this into focus, while the bottom 50
percent earned only 13 percent of the income, they only paid 3 percent
of the taxes. Now, I didn't get an MBA from Harvard, but looking at the
stats appropriately, I'd have to say we have a fairly progressive tax
system in place. It's not perfect and I always feel I pay too much in
taxes, but the people who make the most (usually through hard work and
risk taking rather than through some kind of monetary trickery) pay the
most.
AMERICAN DREAM
Here is the American dream: Work hard, invest wisely, and never assume
someone else is responsible for your success. Nowhere in the
constitution is there a guarantee of life, liberty and happiness. It
only assures the ability to pursue those three principles. It's kind of
like coaching a soccer team....you can't guarantee they will win, but
you train them with the skills they'll need and supply the pitch they'll
play on and hope that they've worked hard enough to win.
Now in light of our country's current financial situation and the lack
of action by Congress and leadership by the president, one should look
back at history to assure we don't repeat the mistakes of the past.
While the stock market is grinding its way back, our economy is lagging
and causing too much unemployment and underemployment. The country's
debt continues to rise as a percentage of GDP (not a good thing). I
think we can agree on this fact.
Now here's the history lesson. Back in June of 1937, as the country was
starting to show signs of exiting the 1929 Great Depression, FDR and
Congress agreed to raise taxes (and cut spending), to try and cut the
huge deficit caused by all the New Deal spending. That created a
13-month recession as America downturned again. Industrial production
fell 30 percent; unemployment rose back up to 19 percent; and
manufacturing output fell back to 1934 levels. It really wasn't until
1939 that we again started to see good growth and finally exited the
Depression at the entrance to WWII when unemployment fell to 2 percent
(the draft?).
WAIT TO SEE
So, while we all wait to see what Congress will do in terms of keeping
the Bush tax cuts in place, history does show that raising taxes on any
class of taxpayer will have a detrimental effect. Think about it, all
you hear today is that people are holding onto their wallets (read
investments in housing, construction, businesses, etc.) to see if
Congress is going to raise their taxes. Taking a point from Senator
Sanders' opinion letter, what does he think the person who makes $1M is
going to do if he's able to keep $100K of his income as he does under
the Bush tax cuts? He might just come up to Waitsfield and buy a second
home or a condo at Sugarbush. Maybe he's going to start a new or another
business! Get off the class warfare bandwagon!
In an effort of full disclosure, many years ago I served as an alderman
in the city of Burlington when Bernie Sanders was the mayor. I served on
the finance board with Bernie which had power over the city's budget.
While I always admired Bernie's zeal for the job and his commitment to
his cause, we very rarely agreed on how city money should be spent. His
tone on class warfare has only gotten louder in 30 years, but I would
counter that this country doesn't have a taxation problem but one of
spending. Until we can get a handle on that, we will always be pointing a
finger at who should cough up more money.
Hildebrand lives in Waitsfield.
