We, the Enablers

Previously in this space I kind of beat up on corporate America, though I did suggest some ways ordinary citizens might help to change things for the better. But thinking further about the economy, I can’t let go of the idea that there is something quite wrong in this country, a country whose collective talent and energy has made us the world’s leader in opportunity, where the belief in that opportunity has made us the place where just about everyone wants to live.

Opportunities were abundant after WWII, and every plain Joe or Jane who had a dream of getting rich, or at least richer, had every reason to believe that by dint of hard work it was possible.

Fast forward to the 21st century. Well, now we hear a lot about low unemployment rates, but what happened to the folks who worked for Tyler Refrigeration? And we hear every day about the fantastic gains in the stock market, but just who is gaining? Not Joe or Jane, that’s for sure.

Nor do I insist that they must be charitable with their resources, though some of them are, and they are to be saluted.

No, I think there is a larger issue here, and one that we must identify and address if ever we are to have a society that works the way we all say we want it to. But first and foremost, we need to quit rolling over and accepting as a given what is fundamentally contrary to the American dream.

We need to discover, for starters, whether it is true that irrelevant features of our socioeconomic structure — that is, unrelated to individual creative effort, hard work or wise investment — make it too easy to amass a huge fortune when it is clearly not contributing to our economy.

Most obviously, there are the many creative ways the very rich escape the “tax man.” For example, I subscribed to what I thought was a travel magazine; it turned out to be a guide for retired folks who might wish to change their citizenship and residence to Costa Rica or Belize in order to avoid income taxes! Not interested in leaving the country? Well, did you know that you can still deduct the taxes on a second home even though you may use it only a week or three each year?

Here lately, it’s hedge-fund profits that are causing comment, taxed as they are as capital gains (15%) rather than as earnings (which they really are) that might cost the clever manager as much as 35%. (For that matter, do you remember when the top income tax rate dropped from 75% to 70% and then to 50%? And did you know that during WWII it went to 94% — yup, there was definitely shared sacrifice then.) Have you had a 15% tax rate lately? You might be inspired to know that there’s an effort in Congress to rectify this.

If it is true that the preponderance of our wealth is unrealistically tipping toward the top of our economic pyramid, what are the effects of this phenomenon? Can they be good for the country?

Well, most of us are not so desperate as to lose our homes or go without meals (though too many of us are!), any more than most of us are very wealthy. But as for the middle class, there is a lot of agreement that people are working harder without seeing any significant improvement in their standard of livings, while government programs and benefits that raised the standard of living are cut and cut and even eliminated.

In the long run, I think most will agree that there is a problem here. It’s partly in the mechanisms that we’ve allowed to be put in place for steering the course of our development, and partly in our lack of will to understand the need for and demand adjustments to our tax system. Clearly we haven't had the leadership interested in solving it, let alone in persuading us to follow.

The last thing we need, though, is a citizenry willing to shrug its shoulders and sigh and accept that the dream is a thing of the past.