Sunday, December 4, 2011

Should We Slow Down the Rich or Speed Up the Poor?

There is no question about American society, these days. The rich are becoming richer and the poor are becoming poorer. The spread between the two is becoming more marked every day. As I mentioned in my blog post of 23 November, the share of money going to the top 1% of earners in America has increased from 8% in the 1960’s to 20% today. At the same time, incomes of the lower income group have been stagnant for several decades. Observers have noticed that the middle income group has been decreasing in size.

Liberals insist that the way to remedy this situation is to tax the rich, knock them down in the economic hierarchy; and that is supposed to equalize our societal unbalance. I would propose a different approach to the same problem. My approach is founded on the fact that society is becoming more and more sophisticated and requiring of more sophistication in education and training.

I read in the newspapers that even in this recession and period of high unemployment; companies are having trouble finding skilled workers for blue-collar jobs. Welders, diesel mechanics, finish carpenters, etc. are in short supply—simply because those jobs require a higher level of training and education.

It is my opinion that instead of penalizing the upper income group for making money, our society should be working to train up more skilled blue-collar workers and white-collar executives and supervisors. That measure would narrow the gap between the rich and the poor.

Punishing the rich is an exercise in futility. Our government is experiencing a deficit if revenue; and overtaxing the rich will only decrease government revenues. One fact of taxation in the United states is that those who make $1 million/year accounted for about 0.2% of all tax returns but paid 20.4% of income taxes in 2009. Those with adjusted gross income above $200,000 a year were just under 3% of tax filers but paid 50.1% of the $866 billion in total personal income taxes. This means the top 3% paid more than the bottom 97%. Yet the 3% are the people that President Obama claims do not pay their fair share. Before the recession, the $200,000 income group paid 54.5% of the income tax. (Redacted from an editorial by Robert Barron in the Wall Street Journal 8/24/11)

The way to prosperity is to train up the poor and the uneducated to take their proper place in our economic scheme of things. Leave the rich alone and let them earn as much money as they can—that will benefit government revenues. But get the lower classes in our society to bring up their earning capacity.

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