America has always touted itself as a classless society. Yet we have never been without a class system. Although we rebelled against England, its mark was imprinted in the mind of the American people. They have a House for the Lords and another for the Commons. And to this day they support kings and queens. Yes, the king and queen no longer have direct political power but they are representative of the government. They are given a salary based on to who they were born.
The US constitution allowed only men with land to vote. We allowed only men to own property. So we have never been a society without class. At times we have tried to limit the advantages of class but we have never succeeded in destroying our class system. And some say (which I tend to believe) you can never rid society of a class system completely. That is why in a democracy we should always even the playing field.
In America today, the class system has never been so strong. The median net worth of a senator was $3.2 million, versus $900,000 for members of Congress. Supreme Court Justices come from two ivy league colleges Harvard and Yale. The only exception started at Harvard and later transfer to Columbia Ruth Bader Ginsberg. These are not facts of a society that Is leveling the field.
Furthermore, we have created laws not to tax the rich. During one of our economies biggest boom years under the presidency of Eisenhower we tax the wealthy, from 1953 to 1961, in the top income bracket a marginal tax rate of 91 percent. Taxes on corporate profits were two times as great as they are in 2017.
Despite all evidence to the contrary we have been convinced that to tax the wealthy will lead to an economic downturn. We have forsook an inheritance tax because you could only pass eleven million dollars to a couple before their inheritance would be taxed. Although this effected only 0.2 percent of the population a great many in our society opposed an inheritance tax.
I find it hard to believe that billionaires are acceptable in a country with so much poverty. Yes maybe if everyone’s basic needs were met maybe I could wrap my mind around a single person having so much more than others. But we have one of the weakest social support networks in the first world.
A recent study showed “The probability of ending where you start has gone up, and the probability of moving up from where you start has gone down,” For instance, the chance that someone starting in the bottom 10 percent would move above the 40th percentile decreased by 16 percent. The chance that someone starting in the middle of the earnings distribution would reach one of the top two earnings deciles decreased by 20 percent. Yet people who started in the seventh decile are 12 percent more likely to end up in the fifth or sixth decile—a drop in earnings—than they used to be.
I do not believe that everyone should be paid the same or close to the same. Some people are willing to go to more schooling, others are willing to take greater risk, others fill needed niches, some work harder, and some have more talent and all of these deserve more pay than others. But to have an unlimited amount of difference in financial return between the average working man and the CEO is hard to accept. That we allow this inequality is saying we believe in a class system.
Neither do I believe in a class system reinforced by inherited money. There is no way that a Paris Hilton deserves so much more than any other child. Every child should be born with if not an inheritance a promise of an education, healthcare, food, housing, and access to technology to keep up with others. This is the least we could do. Thorstein Veblen in his famous book ‘The Theory of Leisure Class’ Proposes that we need the wealthy’s ‘conspicuous leisure’ to keep the economy running. Many never understood that he was writing satire. We know today it is the poor and middle classes who will spend the money attained by tax relief or government funding. They have so many financial needs they will not be able to save as happens when the very wealthy are given extra cash.
‘The Republicans in the new tax cut for the wealthy used the flaw rationale that the wealthy given more money will re-invest in the economy. What we have found so far is this is not so. Tracking by Americans for Tax Fairness shows that only about 400 out of America’s 5.9 million employers have announced any wage increases or one-time bonuses related to the tax cuts. That’s about 0.007 percent. In fact, real wages have actually declined since last year after accounting for higher gas prices, prescription drug prices, and other rising costs.’ (Research & Commentary August 22, 2018 by Kayla Kitson at Inequality.org)
The satire of Veblen of the need of conspicuous spending and leisure of the wealthy has become with a twist the economic theory of the day. Hopefully, one day we will have an economy more biblically based where the poor are taken care of, Jubilee Years are practiced, and loans with interest are forbidden.