Tuesday, August 23, 2011

Government is No Robin Hood

While on our trip, I read the article, "Punishing the Rich is Impractical, Unethical", by Michael Medved in USA Today. I am not familiar with Medved, but I found this article very interesting. Here are some of the points I liked (in my words):
  • The top 5% earn 35% of adjusted gross income but pay 59% of all income taxes.
  • It is normal to want to emulate people who are wealthy. It is wrong to want to "annihilate" them.
  • The rich generally work hard, earn money, pay taxes, spend and invest. We should not want to discourage this pattern.
  • Instead, we should focus on ways to break dysfunctional behavior that leads to poverty (help teach new skills, better schools, safer neighborhoods, etc).
  • The government taxes tobacco heavily, and has reduced smoking rates. It also subsidizes loans and grants and has tripled the number of people able to gain a college education. It does not make sense to penalize them.
  • Tax hikes will not penalize the already existing millionaires and billionaires (who live off investments). Instead, it will place obstacles in the way of those trying to become millionaires and billionaires (by taxing income).
  • And in Medved's words: "Though progressives trumpet 'fairness' as their priority, there's nothing fair about government conferring generous dispensations on dysfunctional, dependent conduct and imposing onerous encumbrances on those who enrich both themselves and others. It is both unwise and, at the deepest level, unjust to promote hatred and resentment where gratitude is due and to offer indulgence for values that require correction."

The idea of encouraging good behavior and fixing dysfunctional behavior makes sense to me. I think America's dream is that we all have a chance at wealth. It is wrong to demonize that desire, and the path to wealth should not be discouraged.

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