I hear complaints from heavily taxed friends that progressive taxation is grossly unfair. Their plea is simple: If someone is fortunate enough to command a high income, why should that someone have to pay more for the same government services that others receive?
Further, they protest that overtaxing the rich leads to a weakened economy, albeit that argument loses ground with the recognition that during the 1950s, a time when the highest tax rate was 91%, the economy was in what was referred to as the Decade of Prosperity.
In truth, there is no direct correlation between high tax rates and the economy. (Tax cuts can slow economic growth by increasing deficits and crowding out private investment.)
All well and good, but there is more than one reason for progressive taxation, including one that resonates throughout history. When the gap between the haves and have-nots grows too wide, resentment grows proportionally.
Those who remember history are aware (or should be) that this resentment can lead to the kind of response that few would recommend. In Russia, France and even Britain, it has led to revolutions, none of which was pretty. Think of a soap bubble permitted to grow beyond its capacity to sustain itself. Like that soap bubble, the fragility of it should have been seen.
Currently, the haves (the top 0.1%) control almost as much wealth as the bottom 90%, a gap that will come to be even greater as a result of the recent tax cut that greatly favors haves over the less fortunate. The haves act as if this should be accepted by all, that the have-nots, rather than complain, should make themselves more valuable, get more education, work smarter. It does not matter if this is a fair argument, it matters only that it exacerbates a dangerous situation.
Resentment will continue to build as others see only arrogance in such a position. We saw the effects of this resentment in the 2016 election, where, as President Trump put it, the “poorly educated” flocked to a pied piper who seemed to understand their plight. The effects can be seen now when, although an increasing number of these people are beginning to realize their hero cannot be trusted to tell the truth, they still cheer as he speaks.
This is a mini revolution, but we would be remiss if we thought the resentment behind it will simply fade away. It is unlikely that the less skilled will come to accept the haves’ point of view, especially as non-skilled jobs continue to disappear?
Yes, high earners deserve to enjoy the fruits of their labor, but it would be foolish of them to overlook the danger that their wealth and power engenders. They should understand that, rather than an obligation to consider more realistically the less fortunate, it could be a matter of survival that they respond properly to the resentment the gap between haves and have-nots inevitably brings. In this, history is not on their side.
courtesy by : orlandosentinel