Friday, February 17, 2012

"How Much Do You Make?"

The question concerning Mitt Romney is not so much about how much money he has as about how come Romney pays so comparatively little taxes on that money. The immediately accompanying question is how did the rules get into the tax code, allowing Mitt Romney to pay that such a comparatively little amount of taxes?

We can guess the answer to the latter question. It would appear to have to do with Mr. Romney (and his ilk’s) influence on the tax code writing process, relating, one might reasonably assume, to campaign contributions that afforded them such influence.

It could be something else. The writers of the tax code could just think,

“Mitt Romney is a cute Mormon. Let’s give him a break on his taxes. But let’s make it for everyone in his situation, so people won’t think we’re just doing it for Mitt.”

That’s all I have to say on this matter. The arrangement pretty much speaks for itself. I do have some time left, however, so I shall carry on, in a slightly different direction.

The Talking Heads on Television insist that the question posed above – the disparity in taxpaying rates between a huge portion of the American populace and Mitt Romney (and his ilk) – is a legitimate question for debate, while the question of Romney’s actual net worth is discussionally irrelevant.

The Talking Heads on Television tell us that the amorphous but frequently referred to “American People” do not begrudge wealthy people their great fortunes. Which leads to the rather personal and slightly embarrassing question:

How come I sort of do?

Is it because I’m from Canada? There are billionaires in Canada, I think, two of them. By now, maybe three; I’ve been gone for a while. But even, if there are four, or a double-digit number of Canadian billionaires, the idea of enormous wealth disparity doesn’t seem to fit the landscape.

Canada’s a “European-style entitlement community.” When people get sick, Canadians believe money shouldn’t be the issue. Getting better should. I don’t know. Maybe that kind of thinking had an effect on me.

Or maybe it’s because I went to Camp Ogama, where there was an attachment not just to an equality of opportunity but also to an equality of outcome. We had camp-wide “Color Wars” – which at our camp, were packaged not as a “Color War” but as “The Hungarian Revolution”, the competing teams being the workers, the farmers, the students and the doctors – and every one of them ended in an “Ogama Tie.”

Americans believe it’s their Constitutional right to make as much money as they can,

though that right is not stipulated in the Constitution itself. We hear of the “pursuit of happiness”, which perhaps may actually mean the “pursuit of money”, but the Founders of our country were too embarrassed to say so.

But that’s not in the Constitution. It’s in the Declaration of Independence, the writers of the Constitution perhaps thinking that that matter had already been covered. They may also have been thinking,

“Do we really want to put ‘greed’ in the United States Constitution?”

Though not in the Constitution, unlimited wealth is the not so secret mission of every American.

“We want it all! And by ‘all’ we mean ‘money.’ Not that that we want all the money, because we need people to buy our stuff and they wouldn’t be able to if we have all the money. So let’s put it this way. When we say ‘We want it all!’, we don’t mean ‘all the money,’ we just want more money than everybody else.”

Of course, some people don’t make anything or sell anything. They simply move money around, and they receive astronomical commissions for doing so. Right now, those guys, with the possible exception of the internet guys who actually invent things once in while, make more money than anyone.

This is entirely understandable. It has to do with the size of the pie. If the pie in a leveraged buyout is fifty billion dollars, and you’re negotiating the deal, even if your commission is only one percent – and it’s probably more – that’s five hundred million dollars. Or, more loudly – THAT’S FIVE HUNDRED MILLION DOLLARS!!!!

Sometimes the size of the pie changes and even though your percentage of it remains virtually the same, suddenly, through “pie inflation”, your personal paycheck skyrockets.

Media and merchandising revenues (exploited through the advent of free agency) have elevated athletes’ salaries from a small number of thousand dollars a year to twenty million. Today’s athletes are not better than the athletes of the past, at least not that much better – but boy, are they raking it in. Doing pretty much the same job.

Maybe to some degree, athletes are lavishly paid because they are perceived to be “unique talents” (not unlike show business participants). But pro athletes were also unique in the ‘20’s to the ‘60’s when, except for a Babe Ruth, they were paid atrociously. What changed? The size of the pie. (And their ability to bargain for their fair share of it.)

And then there’s doctors. This one, I don’t understand. They may have had job security and prestige in the community, but in the past, if they weren’t, like, surgeons, doctors were not particularly well paid. And then, one day, they were. How did that happen? Did their pie expand too? If it did, why? Maybe the public’s evaluation of what their work required them to do went up.

“You have to do that! We’re giving you more!”

(Ditto for plumbers and morticians.)

For whatever reason – and the only reason I understand involves pies – some people make more than their counterparts in an earlier era, and some people make more today – and sometimes, a ton more – for doing what they do than other people make today for doing what they do.

Income disparity.

I’m no Socialist, but it seems a long way from an “Ogama Tie.”


Zaraya said...

Dear Mr. Pomerantz; I think the answer to your question is, "lawyers".


Blaze said...

"Money is how people without any talent keep score."

Canda said...

How about the fact that Warren Buffet pays 15% tax on his compensation as a fund manager, but you Earl would pay around 46% of money you'd make writing a screenplay that paid you $500,000. There's no fair tax among the rich who make the same amount. The Senate Finance Committee, which Senator Chuck Schumer has great influence on, gets lots of contriburtions from Wall Street. That's why the tax code is the way it is.