Sunday, August 19, 2012


It's not jealousy; we need the money

Conservatives, especially rich conservatives, react to proposals to increase the tax rates on high incomes with such responses as "class warfare" and "you're simply jealous of rich people."  I assert that these are merely sound bites meant to confuse and mislead the majority of voters.  We have in our country some serious problems that arise from the practices of some very rich people in maximizing their incomes.  One practice is moving jobs and factories to countries over seas which offer low wage, non-union workers.  Unemployment is a consequence of this practice.  Unemployment can be dealt with by providing jobs and work for the unemployed   According to apologists for the very rich, it is very rich people who have the money to start the businesses and factories that will provide the needed jobs.  Therefore, the rich should not be excessively taxed, but instead should be relieved of some of their tax burden so that they will have the money to start the new businesses and factories.

This is a plausible argument, but it isn't happening.  I don't see any rush by rich people to start factories to manufacture solar cells, wind turbines, and other new technology devices to provide new, clean sources of energy.  If they start new factories at all, they start them in China or other countries with low wage rates.

The US Constitution has a preamble, as follows:
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
It seems to me that the preamble requires and authorizes the federal government to "promote the general Welfare" by encouraging and enabling the establishment of gainful employment of unemployed workers.  If the very rich won't create the factories in our country to provide employment, the government should do it, either by directly building the factories and hiring the workers or by providing suitable incentives and help to private entrepreneurs to do so.  This support requires money - lots of money.  Where is the money to come from?  Obviously, from the people who have lots of money and can easily afford an increase in their tax rates.  And, what could be fairer than that?  Let the rich, many of whom cause the unemployment problem, help pay for the cure.

Rich people are not sinful or evil.  They are just like the rest of us.  We make financial decisions to minimize or expenses and losses and maximize our gains.  When we shop for cars, we do our best to pay less than the sticker prices and try to negotiate deals with the car dealers.  We buy groceries at grocers that provide the best food at the lowest prices.  That's what rich people do with the money they invest.  It's more profitable to invest in a factory in China or Mexico than in a factory in the United States because of the labor cost.  What government has to do to reverse this trend is to make it more profitable to build and operate a factory in the United States than in a foreign country.  This incentive may be a tax break, a no-interest loan, or an outright grant or subsidy.

We need the money.

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