Decided to torture myself with Meet The Press this morning. Former HP CEO Carly Fiorina was a guest. She admitted that taxes would have to rise on millionaires and billionaires. Then she made the familiar argument that families of four who live in high cost areas don't feel like millionaires when they make a quarter million dollars a year. Nobody challenged her on that. But, they never do. I'm used to it. And I'll bet you that Carly has probably had hard working executive assistants who she's paid in excess of $200k a year. It's not uncommon in big public companies and they're often worth every penny.
Point is, if you live in Fiorina's orbit, you can make orders of magnitude more money than most of your fellow citizens and still feel like you're struggling. The distortion is caused by the existence of Fiorina. It may be unavoidable. But let's be honest about what it is.
On the panel, Al Sharpton had made a very direct and, I thought, fair point in response to frequent calls for "shared sacrifice" to solve U.S. budget issues. He wanted to know why there should be shared sacrifice when there wasn't shared prosperity. Nobody answered him, and I didn't expect them too. Fiorina came closest to addressing his point. Public sector unions have generous pension and pay packages that are bankrupting America's cities and states.
I knew it. It's those no good fat cat sanitation workers picking up my garbage in their tricked out Humvee limos and then helicoptering out to Fire Island for long summer weekends. Thanks, Carly. I had no idea. Nobody objected to her saying this.
The defenders of the wealthy are going to push a shared sacrifice argument as if it stands for some sort of moral good. We're all in it together so rah rah rah!
But, we aren't. I think we have to be a little less polite and start telling the truth. The point behind progressive taxation isn't just that the rich can afford to pay more, it's that they disproportionately benefit from government services. For example:
A public sector unionized worker with a pension vs. Carly Fiorina. Who gets more out of the efficient functioning of financial markets? Yes, the pensioners money is invested. But, it's also invested in some of the very same assets that have made Fiorina fabulously wealthy. Those pensioners actually inflate the prices of Fiorina's securities. When she sells, who do you think buys?
It's pretty simple but, the more you have the more you can do with what generations of Americans have built. Effectively regulated airways for shipping and travel are good for everyone. But Fiorina, who can afford to go where she wants, when she wants, it's a far more direct benefit.
To my mind, Sharpton got it exactly right. We have already had shared sacrifice in this economy. It's been going on for years.