Saturday, May 14, 2011

Why so glum, Joe?

At creators syndicated, you can find a column written by Cliff Enrico, called "A Rich Guy Speaks Out Against Higher Taxes (part 1 of 2)." In this column, Enrico creates a hypothetical narrator ("Joe") who makes exactly "$250,000 per year before taxes" and works any one of a number of hypothetical jobs:
I [Joe] may work for a large company as a midlevel or senior executive. I may run a successful small retail or service business. I may be a professional — a doctor, lawyer, accountant or architect.
And he, apparently, works hard, sometimes as much as 60 or 80 hours a week. He has little free time and even on Saturday afternoons when he "(or, more likely, my spouse) [might be seen]...trying frantically to get the household chores done that we can't do during the week. But we have no time for small talk — we have to get back to work." He studied hard in college, working at menial jobs and not enjoying the fabled "undergraduate experience" of alcohol, sex, drugs, and rock and roll. "I'm actually," he says, "having a lot less fun than you are." He is either what amounts to an at-will employee, or a professional who has to worry perpetually about malpractice suits, or an independent business owner who lives his business 24/7. His ability to find other work if he is laid off is severely limited, especially if he is a senior managers whose skills structural changes in the economy have made obsolete.

In part 2, which I haven't found or read yet, he'll explain where his income goes. But "Joe" offers the following teaser: the money doesn't go "for luxury yachts, McMansions, sports cars, or fancy parties."

The tragedy (or comedy?) of this column is that Enrico raises an important issue. We (by which I guess I mean "people in general and on the news and politicians) target "the rich" and believe they live a life of luxury whereas many of them lead lives full of stress and worries and uncertainty (and, I suppose, quiet desperation).

The "rich" are not nonhuman drones; they are people just like you and me. In many ways, many of us are also the rich, even if we are far from the $250,000 a year threshold that "Joe" has attained. I have more than what a lot of the poorer people I meet on the street have, for example, and even more than what some of my graduate student friends, with whom I am in other ways (e.g., social class, access to opportunities) similarly situated, have. Yet, I would feel very put upon and resentful if (and when) I be accosted simply for my privilege. I would probably be upset if my tax rate were increased significantly. In fact, there was a recent issue that involved a very dramatic change in the way Graduate Assistants at my university are taxed. When I found my and others' paychecks were reduced by more than 50%, I was quite shocked and resentful. (At the same time, for reasons I won't go into now, I'm not sure the change is the rank injustice that some of my colleagues feel it to be.)

The "$250,000 per year before taxes" is of course a reference to the taxation plan that President Obama campaigned on in 2008 and that Democrats have been threatening to implement. (Curiously, the financial destiny of "Joe" and similarly situated comrades appear to have dodged that bullet until at least 2013.) Obama's plan was to ensure that people who made less than $250,000 would see either a decrease in their taxation or no change. (I'm not sure if the tier that Obama refers to includes original income or adjusted gross income (AGI). If it's AGI, "Joe" will still be off the hook by taking the standard deduction or donating about $50 dollars to a charity to put him into the next lowest tax bracket.)

Part of the appeal of Obama's plan is emotional and is attributable, I think, to the fact that a large majority, even most, even almost all, Americans make less than $250,000 a year and to the notion that such $250,000 a year pluss-ers have it so well off that they ought to share the wealth.

Enrico, through "Joe," points out that whatever the merits of this taxation scheme--and he concedes that "everyone should pay his or her fair share of taxes"--singling out hardworking, hard-worrying people like "Joe" is "not 100 percent fair." In fact, "Joe" is resentful that "now you want to raise my taxes so I can pay for YOUR health insurance or the federal budget deficit I had nothing to do with? Excuse me, but why should I pay for your — ahem — failure to achieve what I have in life?"

Again, I'm on board with the argument that I see as implicit in Enrico's column. I believe we should use utmost humility and caution when we become righteously indignant at how easy the rich supposedly have it. (For a recent example of me waxing indignant and forsaking humility, see my rant about tenured professors in this post.) We should remember how the lines we draw for tax purposes between "rich" and "poor" are drawn much more because a line has to be drawn somewhere than because the placement of the line represents a sharp moral distinction. Finally, we should beware of how facile it can be to say that the problem is members of group A have more money and are much less numerous than members of group B, and the solution to the problem is to take money away from group A. If that is indeed the problem--and I think, to some extent, it might be, although I have seen credible arguments claiming that most of us in America, regardless of our income, are materially better off than we would have been in, say, 1960--it is not the whole of the problem and such "solutions" are never so simple.

What I disagree with is way Enrico fashions his argument. He makes out his "Joe" to be too much the ideal type and more importantly he ignores certain important questions.

"Joe" is a bit too good to be true. He worked a menial job, or took extra classes to graduate early so as to save his parents money. He didn't, as he accuses his unnamed, imagined, and redistributionist-loving interlocutor of doing, engage in the college practices of "getting snoggered at fraternity or sorority parties or chasing each other around the dorms dumping buckets of water on each other while wearing only your underpants (you know who you were)."

"Joe"'s upright fastidiousness is hard to believe. He may have worked a menial job and took extra classes, but does that mean he never took any time off for himself whatsoever, even to watch a re-rerun of MASH on his TV or to take walks to settle his thoughts and enjoy the spring air? Did he never eat a candy bar or pay $5 for a fast food meal in lieu of a healthier meal that he could have made at home for $2? Did he never socialize beyond "networking with alumni, trying to land the entry-level job that would propel me into the upper-middle class"? Sad life, but I suppose it's possible.

But Enrico / "Joe" also neglects ways in which he was probably helped by more than just his pluck and abstemiousness. Did he have student loans? If so, he benefited from easy access to credit and, depending on the loan, credit that might have been subsidized by the government or at least has interest rate caps. If he had some sort of scholarship, even if it was merit based, that was help that might not have been available, and the money had to come from somewhere. If he went to a public university as an in-state student, a good portion of his tuition was subsidized by the state. If he went to a private university, his institution benefited from non-profit status. If his parents helped--which he suggests might have been the case--he benefited from having a family in a position to help him.

My objections here have something of an ad hominem flavor about them. If I am right, even on all these points, that doesn't disprove what Enrico is arguing. It does, however, call into question of who is likely to be convinced by his argument. I knew at least a few dedicated undergrads; in fact, I was one, although not as perfect as, and perhaps had more assistance than, "Joe." The list of people who have worked hard in life and yet still don't make $250,000, or even $30,000 a year is probably very long. Are they, upon hearing of "Joe's" abstemiousness and virtue, likely to agree to stop all calls for raising taxes on people in his income bracket? Are they going to abandon readily the facile assumption that "Joe" has it easy? Probably not, even though the actual facts Enrico sets out, if they are true, ought to lead the reader to that conclusion.

No, I suspect Enrico's target audience is either those who make $250,000+, or those who make, say, $100,000 +. The most likely effect of Enrico's argument, it seems to me, is to assuage the guilt that some in the higher income levels might feel about their own income and their relative privilege.

That is my guess and it's only a guess. And as a guess, it's only important if Enrico's goal is to reach others beyond merely his economic peers.

What bugs me more is the questions Enrico declines to address. What about people who work 60 to 80 hours a week and make, say, minimum wage or even a higher wage than minimum that does not, even with OT, make up the $250,000? Do these people cease to have chores and other things to take up their free time if they have less money? If the tax increases are unfair because they are targeted at the $250,000+ brackets, what would be a fair line? (One of his asides--"Millionaires and billionaires should pay more income tax than average folks because they can afford the 'hit' and still live the lives they've become accustomed to"--suggests that he favors merely ratcheting up the line at which people are considered justifiable targets.)

None of the issues I raise invalidate what appears to be Enrico's point about not demonizing the $250,000 crowd. I'll also acknowledge that doing what it takes to earn $250,000 is probably not worth it, for a lot of people, and that working less and earning less can be its own reward. I acknowledge also that columns have strict limits on the number of words an author can use--Enrico simply doesn't have enough space to go into the nuances of his arguments or the possible objections one might raise. Columns also function more as thought-pieces, meant to provoke discussion or convince people to look at issues in a different light. And in these senses, Enrico column "works."

And yet there was such a lost opportunity. I haven't read his part 2, so I don't know exactly how it will come out, but I regret Enirco's failure to acknowledge that we just might all be in this together. Maybe "Joe," instead of being the abstemious and self-denying business major, is someone with his own faults as well as virtues, someone who has committed his own mistakes and maybe made a certain share of wrong turns. He did a lot of things right, and he worked really hard, maybe even harder than many of his colleagues. But perhaps "Joe" might be human enough to regret the fact that some people find it difficult to make ends meet, even if they "had it coming." Such acknowledgement would not resolve the ever present problem of what the tax rate should be, what the best health insurance reform would be, or a variety of other issues. But it would edge us all close to the realization that, as one of S. E. Hinton's characters said, "things are tough all over."

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