Critics on the left want redistribution of income. Joe the plumber heard this directly from candidate Obama. The liberal view of the overripe fruit to be picked for redistribution is quoted from one respondent to my last column:
“ the word ‘earn’ carries a connotation of hard work and just desserts, which doesn’t mean sitting on your behind and collecting dividend income from trust funds and stock portfolios….most of America’s top earners have investments, often inherited, which bring them income without a lick of work.” A nation of Daddy Warbucks, pockets stuffed with Monopoly money.
I believe I’m in the top 20% of earners in the U.S. My parents grew up poor in New York, my father working two and sometimes three jobs to support his family. My older sister dropped out after one semester in college, and my older brother graduated from several years of reform school. My parents stressed to me the importance of hard work and education. I went through college on a merit scholarship, loans, the money I earned working during holidays and summers, and about $1,000 per year from my parents. I spent four years in medical school accruing more debt instead of earning income. I then worked 110 hours per week as an intern at less than $2.00 per hour, and invested four more years training at very low levels of salary. Money was thin during my first years of practice in Massachusetts, but my wife and I immediately began saving for retirement. Money was put away regularly for college starting when my daughter was three and my son was one. For many years our house was furnished with leftovers, and some rooms had no furniture at all. We bought cheap cars so that we could save. And yes, we put that money into investments: retirement funds, my office, our home, and we get dividends from Massachusetts municipal bonds. Over thirty years, it adds up. We made these choices to work hard, save, and not spend. To the left I am a fat cat ready to skin.
This is the story of small business men and women all across America. They work hard and long hours, as there is no boss more demanding then success or failure that is solely your own responsibility. They put up their own money and are at risk for the money they borrow and unpaid bills if the business fails. These folks create commerce where nothing was before, without which the government has little to tax. These business people create jobs. They are everyday heroes. I hope they succeed and invest money in stocks and bonds that can be recirculated to build roads, schools, and other businesses.
Corporate CEOs are suspected villains. The press gets apoplectic when a corporate CEO receives the same income as Johnny Depp in Pirates of the Caribbean. I’m thankful for these CEOs. They are highly trained and experienced stewards of big business. Without their success our companies fail here and in competition with foreign concerns. Economic activity is lost, and there is less demand for their suppliers and vendors. Jobs are lost, and there is less wealth for the government to tax. They produce value for their shareholders, but their success is indispensable to our society. Yes, there are corrupt CEOs as there are corrupt politicians, but I would have our children collect trading cards of our successful CEOs over sports stars.
Governmental redistribution of income is not a new idea.
“From each according to his abilities, to each according to his needs.” Karl Marx
This didn’t work very well for the Soviet Union, Communist China, North Korea, Cuba, Venezuela, and now Greece. Many established socialized countries are working hard to undo the last forty years of redistributive government. Sweden and Canada are prime examples of the prosperity that follows the reduction in government size and control. Our current government is running in the opposite direction. Some people won’t learn.
A just society certainly protects the poor and sick. Great disparities of income and class warfare are not desirable. Stripping high earners of income to redistribute wealth penalizes hard work, investment, and innovation, and is scapegoating. The best way to reduce the gap between rich and poor is to improve opportunity at the bottom. Improved education particularly in the sciences and vocational training, and government policies that encourage the return of jobs to the U.S. such as a sharp reduction in corporate tax rates and relief from over-regulation would be more fruitful approaches.