Congress is gearing up for a debate on whether or not to extend the Bush tax breaks that would revert back to what they were when President Clinton was in Office. It is shameful that this would even be debated in this time of national difficulties. We are fighting two wars costing billions of dollars a week, Congress just refused to approve the extension of unemployment benefits, our national infrastructure is deteriorating, and our educational institutions from kindergarten to university are in peril. All arguments in favor of continuing the tax breaks for the wealthiest minority of Americans are based on opinion, not fact.
Here is the problem. Anyone earning more than $250,000 per year most likely does not need the relatively few bucks they would realize from the tax breaks. But, I’m willing to allow that maybe the group between $250,000 and $1 million per year could use a few extra dollars. Not likely though. Think for just a minute about who the people are who earn over $1 million a year. The small business owner, the school teacher, the police officer? No on all accounts.
We are talking about a select few who are professional athletes and entertainers, corporate CEOs (not the individual who has incorporated but, those who are CEOs of large banks, corporations and so on), doctors and attorneys (again not the doctor in your clinic or the attorney who did up your will, but the elite few), marketing and sales professionals, investment brokers and speculators, and finally those who inherited a fortune from the family, “old money.” I don’t begrudge any of these people their money as I understand the randomness of being born into the “right” family or being blessed with outstanding athletic ability. It’s just a matter of fate. My problem is that I’m not sure they are all pulling their fair share of the weight. One would think that they would be glad to contribute to the general good. After all, they have been blessed to live in one of the few nations on earth where they are free to earn that much money, in a stable political environment, and have a government that assists them by providing a good infrastructure such as roads and other forms of subsidized transportation in order to move their goods from origin to market.
We should be compelled to ask, what is the distribution of income in the stratosphere? According the 2000 census there were 1,324,000 people with reported incomes over $250,000. By 2005 the Census reports that that figure had jumped to 2,023,000. I then asked myself how many millionaires are there in the United States. The answer is quite a few. As of 2009 there were over 7.8 households (not individuals) worth more than $1 million including more than 1000 billionaires. This is interesting in that the estimated 2005 population was 296,410,404 with a total non-farm employment of 120,604,265. The millionaire class comprises about 1% of the total population, but they control 38% of all wealth in the United States. That leaves 99% of the population scrapping over the other 62%.
We then come to the question, would a tax break for millionaires create jobs? My conclusion is, not likely. I don’t think extending the tax break, or not, will change behavior of this crowd. It’s unlikely they will hire another maid or gardener. That means they would have to clean their own bathroom or cut their own grass. Another question is will they buy more goods with the money? Again my conclusion is no.
I have no experience with being a millionaire, so I had to think quite a bit about what it is that millionaires buy. On the other hand, I don’t think most millionaires are all that ostentatious. For example, I understand that a local millionaire drives a Pries. But, he is known to be a big supporter of Democratic candidates and causes. Just as an exercise, I put pen to paper and jotted down a few things that I thought millionaires would buy that might create jobs, over and above what we all buy to sustain ourselves, whether we personally buy the stuff or our household staff make the purchase. I came up with cars and yachts. That is about it. However, after doing some research, I learned that when it comes to cars for millionaires there are some well known brands: Ferrari, Rolls-Royce, Lamborghini, Porsche and a couple of others. In thinking about yachts over thirty meters I came up with a few (this is an area with which I am totally unfamiliar): Sunrise Yachts (Turkey), Binetti (Italy), Blohm and Voss (Germany) and Christiansen Yachts (Vancouver, B.C.). Get the picture? Not one is an American firm which, if a purchase is made, would create or sustain jobs.
In the end I think that the political fight over the tax cuts for the wealthy is personal for most members of Congress. There are a total of 535 members in the House and Senate. Of that number 261 are millionaires, including: John Boehner ($6 million), Eric Cantor ($2-6 million), and Mitch McConnell ($3-13 million). And they voted to not extend unemployment benefits for those in need. I rest my case.
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