Al's Opinions

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.

Labels: moving jobs overseas, taxing the rich, unemployment

The other day I heard a report on the news about a state legislator who argued that since many large corporations are laying off employees the state should do the same. I suppose that if the legislator were a member of the federal legislature he would argue that the federal government should also lay people off during recessions, just like other enterprises.

What on earth was he thinking? Unemployment is increasing during a recession because large corporations are laying off workers by the thousands. Governments should follow the trend and make unemployment even worse? Where are all of these unemployed workers going to find employment and wages to support themselves and their families? I guess this legislator thought that the unemployed workers could simply hibernate or live with their relatives until times got better and the recession turned into a boom.

This legislator was speaking in the context of whether to raise taxes. Unemployment causes additional problems for states. There's unemployment insurance, of course. There's welfare for people unable to find work when the unemployment insurance runs out. There are increased medical costs as unemployed workers turn to emergency rooms for needed medical care. And so it goes.

I tend to view the problem of unemployment as a societal problem. We have constructed a society in which unemployment seems to be a natural consequence of the way the economic system operates. We all have a responsibility to care for those less fortunate than those of us who still have jobs and good incomes. How is this caring to be done?

It can be done in a haphazard way by letting various religious and other charitable groups provide food and shelter for those who are out of work and money. This method doesn't apply the obligation to care for the unfortunate evenly. Only those of us who contribute money and labor to these charities bear the load of caring for the unfortunate. In addition, there aren't enough charities to take care of all the unemployed.

It can be done in a fair way, with each person who has a good income contributing a fair share. That means that government provides the food and shelter and the money comes from taxes. Using this argument, I assert that taxes on those still employed should be raised during a recession to pay for supporting the unemployed.

I know this argument will drive the legislator in question crazy.

Labels: recession, taxes, unemployment