Friday, October 21, 2011

Help Yourself?

The 32nd President of The United States was the legendary, by some accounts great, Franklin Delano Roosevelt. He was affectionately known to the masses as “FDR.” FDR became President during a horrible economic time for America.  FDR took office in 1933, immediately following the stock market crash of 1929.   From 1929 to 1933 the economy had basically hit rock bottom.  FDR was faced with a very tall task.  During his first 100 days in office, FDR introduced "The New Deal." One of the key initiatives of the deal was to provide relief to the poor. As a result of this new deal, many social programs were introduced  and government spending drastically increased.  Times got better, but people were still out of work. Unemployment was horrible. It made some believe that more spending had no direct relation to more jobs. Opponents of the new deal believed that the government should not be spending such large amounts of money on social programs.  Does this sound familiar?  Should the government spend money to stimulate the economy, or should the government lessen the tax burden on wealthy individuals allowing them to hire people and invest money back into the economy? Let's look at both sides of this debate.

In today's' America, the top 1% of Americans basically control most of the wealth. Sit down and think about that for a minute. Some of these individuals want the government out of their pockets, and want to cut social programs.  Why not? The rich don't want you in their pockets. They have worked very hard for that money. Social programs do not promote work, it can be said that it promotes laziness. Those individuals need to carry their own weight. 

Logically speaking, this country was founded on principles of shared sacrifice.  The top percentage should not have an issue with paying more in tax. It would also seem logical that these individual would care about the less fortunate, elderly, disabled and children in America.  Taxing the rich and cutting government spending creates class warfare.  It would be crazy to expect a family of four, making $50,000, to pay the same amount in taxes, as a family of four making $500,000 a year.  That seems a little unbalanced, biased, and “un-American.”  We need social programs. We need health care; we cannot have a sick society. We need social security; we want our seniors to live a good life. We need welfare; every person does not have the same opportunity. FDR once said, "Help the forgotten man at the bottom of the economic pyramid."

In 2011, many Republicans and conservatives feel the government should cut back on spending and lower the tax rate on wealthy Americans.  Herman Cain and Rick Perry, both Republican primary opponents, have discussed the adoption of a flat tax.  A flat tax basically requires every American to have the exact same tax rate. Our current tax system is progressive, meaning the wealthier American pays higher rates.  A flat tax will lessen the tax burden on wealthy individuals and decrease government spending on so-called “worthless” programs. In a nutshell the wealthy American will keep more money in their pockets.  This money will trickle down to the poor without government interference.  This will allow the Government to cut programs such as welfare, pensions, social security, etc.  These programs will become unnecessary because the wealthy American will put people to work.  A decreased tax burden will allow employers to hire and pay more.  This will eliminate deficit spending, and the country can become safer by allocating that "spending" into protecting our borders, technology and our infrastructure.  Defense spending makes money.  Is that not smart?  During World War II, unemployment decreased because factories were built to manufacture weapons used during the war.

This is a good one.  I promise you will hear similar rhetoric in the upcoming Presidential debates. Occupy Wall Street v. The Tea Party.  No matter what side you are on, at the end of the day we as Americans need to support each other.  Should the wealthy business man be trusted to create jobs without government interference?  Or should the government should step in an ensure that wealth is distributed equally? Was the government created to assist the poor? Or, was the government created to assist a free enterprise society?  These arguments have caused nasty debates throughout American history.  Who is right? Who is wrong? Where is the middle ground?

1 comment:

  1. Ashton, it's good to read such a balanced and unbiased article about tax reform, free markets, the evil of the republicans, the goodness of democrats and all of the other absolutes, stereotypes and slippery slope fallacies you have presented.

    Some economists point to a more simple tax structure not as a way to disadvantage the rich, but as a way to broaden the tax base and make sure that everyone participates. Also, many economists want to move towards a consumption based tax, which more aligns the tax revenue with a consumer based economy such as ours.

    Thomas Jefferson said the purpose of government is to advance the felicity of it's people.Which I agree. However,it does not mean that the only way to accomplish that is to redistribute wealth from those that have to those that do not. I suggest that it is not fair or appropriate to undertake this path as it will kill a major aspect that makes this country great - the ability to move from the station in life you were born to another, higher station. This country has drawn great and rewarding links between self-enterprise, self-motivation and financial rewards. Those linkages should not be destroyed.

    Every person and even many republicans believe that the government must help the most unfortunate among us, if not society would not be civil. However, Republican differ in the approach, not the end results. Many moderate republicans believe and support an increase in taxes with concomitant reforms in entitlement programs.