Major flaws in the thinking of conservatives here (which
they tend to exploit in their constituents and Fox viewers):
1. Each dollar that a rich person has was
earned through effort just as each dollar that I have was earned through
effort, and if those poor people just worked harder, they could have as much
money as I do.
Let’s consider this with some simple
algebra. If I make $50,000, then under this assumption someone making $25,000
just needs to double his efforts. He needs to exert 50 units instead of only 25
units of effort. Those who use this logic never consider what is then needed
for me (who makes $50,000) to earn $100,000, $500,000, or even $1 million (the
actual people we are usually talking about). Well, I already work pretty hard for what I have,
but for me to increase my effort from 50 units ($50,000 worth of effort) to
1,000 units ($1 million worth of effort) I would need to work 20 times harder.
That means working an 800-hour week instead of a 40-hour week, lifting 1,000-lb
UPS packages instead of 50-lb UPS packages, and walking 100 miles instead of 5
miles per day to deliver mail. People who argue that raising taxes on the rich
is punishing success believe that the rich earned all of their money. This is
because for the low/middle class (i.e., us), every dollar we have is, in fact, a dollar
that we earned, but this isn’t the case for the filthy rich (or they’d be
dead).
2. The rich (i.e., top 2%) should be labeled as job creators.
There is no evidence to support that
decreasing a CEO’s personal income tax leads him to invest more into his
business. Influences of the industry (supply and demand) mostly drive whether a business
owner hires more people, not how much money he has. He is not going to hire
more workers if his product isn’t selling. He will only hire more workers if
people are buying his product. In other words, he will not hire people if they're just going to sit around. His personal take-home income is mostly irrelevant here. There
are even several examples of companies laying off workers despite tax
breaks and increased revenue. (http://www.mediaite.com/tv/maddow-draws-contrast-between-kochs-record-revenue-and-kochs-declining-work-force/).
3. Taxing the rich decreases incentives.
This stems from the flaws in assuming that
every dollar a rich person has is a dollar they earned and in assuming each
dollar increase equals a unit increase in happiness. Are you telling me that if
we limit Donovan McNabb’s salary to $1 million instead of $6 million, he’ll
find another job to make more money? (I don’t think he’s capable of being a
hedge fund manager.) High-paid individuals will continue to do exactly what
they’re doing because they are just as happy at $1 million as they are at $6
million. Again, for the low/middle class, each dollar more usually does mean
more happiness. However, research is consistent in showing that once our
physiological needs are met, money has much less of an effect on our happiness.
Many strategically believe that this is the relationship between money and happiness.
As income increases, so does happiness in the same way at all levels of income.
As income increases, so does happiness, but less so among higher incomes than lower incomes. So if you're poor, a little money makes you really happy. However, if you're rich, that same amount of money has a very little effect on your happiness. (This is why Donovan McNabb would be just as willing to play football for $1 million as he is for $6 million. In regards to happiness, $1 million to $6 million is much less of a difference than $10,000 to $50,000.)