Progressivism targets achievement, fosters class envy among Americans
Two recent contributors to The Californian's Opinion pages would no doubt take offense if their writings were described as being Marxist. But I quote Karl Marx in his "Communist Manifesto" in this regard: "From each according to his means to each according to his needs." I am deeply troubled by this aspect of their published opinions.
The first contributor, a letter writer, advocated progressive health insurance premiums based on one's income.
She suggested persons with higher incomes pay higher premiums because they could afford them, thereby allowing lower income people to pay lower premiums for the same coverage. She overlooked the fact individual health insurance premiums are paid for with after-tax dollars.
A family in a 10 percent tax bracket pays their premiums with essentially 90 cent dollars. A family earning $60,000 per year with a combined tax bracket of 32 percent, pays their premiums with 68 cent dollars. Families earning $175,000 pay their premiums (and everything else they buy) with 57 cent dollars from each dollar they earn at that level. Progressivism when applied to income and the taking of an individual's personal property is one of the tenants of Marxism.
Brian Miller, executive director of United for a Fair Economy, advocated reinstituting the federal estate tax at its 2000 level, with a $1 million individual exemption and 55 percent rate on the excess. ("It's time to bring back the estate tax," Jan. 24.)
The 2009 level had a $3.5 million individual exemption and a 45 percent rate on the excess and is likely to be made permanent by Congress later this year. He mischaracterized the effect of tax rate cuts as benefiting only the super-rich. Although the highest income earners had their tax rates reduced from 38.6 percent to 35 percent (10.39 percent reduction), families earning $175,000 had a 6 percent reduction (from 35 to 33 percent), those earning $115,000 had a 7.4 percent reduction (from 30 to 28 percent), families earning $57,000 had an 8 percent reduction (from 27 to 25 percent), and the lowest income tax bracket was reduced by 50 percent (15 to10 percent). Each of these bracket reductions meant more spendable income to save or put back onto the economy.
While he failed to mention the increase in revenues to the Treasury as a result of the Kennedy, Reagan and Bush tax rate cuts, he lamented the current estate tax law as a tax giveaway to the heirs of America's wealthiest families.
Miller considers the estate tax as fundamental recycling opportunity to give each generation a fresh start and a chance at achieving the American dream through their own merit. Large estate owners might consider it a nightmare. There is absolutely no correlation between the government's confiscation of one man's property with another man's opportunity for financial achievement.
It seems strange that Miller discussed merit and hard work, but didn't attribute this value to the wealthy. Their hard work, innovation, risk taking, investment and savings and having paid income and capital gains through the years as they grew their estates, seem to be nonexistent items to him. Their success was not created by society, but was realized in spite of the obstacles society imposed.
Estate taxes collected by the government do not spur the economy and often have the opposite effect by causing forced liquidation of long- held family assets. These taxes are spent on government programs. Inheritances received by heirs, however, are generally spent to buy goods and services, thereby contributing to the overall economy. Both writers' progressive ideology not only thwarts achievement but fosters class envy as well.
Angelo Haddad is a chartered financial consultant and holds a master of science degree in financial services.
