OK, now towards the more philosophical.
1.) If the 70% tax rate went back into effect, in your opinion is the benefit more money for those that need it or less of an income gap?
For a while (in the time when I was sort of, kind of rebelling against my socialist dad :wink: ), I was arguing that inequality in itself doesnt matter - as long as the poor also see their income increased, however slightly. Who cares if the rich have their income increased by a multiple proportion, as long as the poorest, too, come out better in the end?
But first of all, there is the question of whether this has actually worked out like that. Just reading newspapers and journals, I've seen varying data; one showing, say, that the poorest 10% in the States now actually has less buying power, if you calculate inflation in, than in the seventies, while the richest 10% has seen its buying power multiply; one showing that the average income of factory workers has stagnated over the same thirty years; another again showing a marginal increase of buying power for the lower-income brackets against a skyrocketing one for the higher-income ones; another showing that those on unemployment benefit in the Netherlands lost 15% of buying power during the reforms of the 1980s and early 1990s.
All of this is by heart, and some numbers I've seen may have applied to the US, others to the Netherlands, or the UK -- I'm no economist, and have long given up maintaining an organised archive of news clippings.
But the lesson I drew from the various pieces is that, in these past three decades of boosted wealth, the same liberalised market forces that had the stock and housing markets booming have benefited below-average earners only marginally at best, and the poorest have perhaps actually lost buying power. So my argument against my father (in effect a variation on the trickle down theory) has, in my perception, been debunked by time - as has the Reaganite trickle down theory itself among serious economists, I believe.
And all of that, of course, is even just on a national scale, contrasting the fates of rich and poor within countries. The global scale, with the poorest countries having gotten poorer rapidly, the "medium" showing mixed results, and the richest getting richer exponentially, is much starker, and whereas bad governance, dictatorships, wars and AIDS have all weighed down immensely, no small portion of the "flying wheel" effect is the result of the nature of the system and of how the cards are stacked in the global economy (rich countries protecting their own markets while having the IMF impose open-borders policies on the poor, etc).
All that aside though, there are also deeper reasons than the mere pragmatic one why I've come back on that belief.
What underlied old socialist, social-democratic, and much of Christian-inspired politics, was that fairness was a valid, independent variable of politics. This was before we, as society, it appears to me, sold out the idea of being entitled, even just collectively, to views about economic fairness, in exchange for the assumption that, since the market economy has proven the most succesful at creating wealth in total, we should also accept whatever distribution of that wealth it creates. As a given, at the very least -- and from what I read, increasingly also as a measure of virtue by itself. Most of us appear to have come to see the way that the laws of supply and demand structure wages as not just a technical/mechanical outcome of the economic system, but as the actual and only "reasonable", moral definition of the worth and virtue of one's work.
The thinking I witness, in this thread for example is that my work does not just get a five times higher a reward than that of the streetsweeper, it deserves five times higher a reward, because the laws of the market have determined so. It is not just my given reward, it is my just reward. And therefore any move that would take a slice off that income (through taxes) is robbing me of my just reward. As if the laws of supply and demand have a moral or ethical dimension - as if they dont just determine how much people are willing to pay for something, but how much someone deserves to receive.
This thinking remains alien to me. I just dont "get" it. In these times, it sounds childish to say so, but I still cant wrap my head around why I should get five times as much as the streetsweeper. Considering that I know very well that I dont work five times as hard. Good, I've invested in education, so that should logically be paid out back later in higher wages - but the difference is much starker than that. And I dont see why that should be so. I can accept that thats the way it works - thats the numbers the machine comes up with in order to make the system work optimally - but it's not by any independent, moral standard, right or fair.
Now do I therefore give away half of my net income to, say, myself give the good example? No, I'm no saint either, and I love my Sunday cup of tea, my fourmonthly flights back home.. the flesh is weak. But standing up and angrily proclaiming that I deserve this income, I have a right to this income, it is my just reward, so nobody touch it - <shakes> - I just cant conceive of it. And I therefore have honestly never winced about paying my taxes - in Holland, I paid about a third of my gross income in taxes, here its practically half, if you count the obligatory contributions to the national pension fund, the national health insurance, the national unemployment insurance (which pays for the unemployment benefits).
So yeah. I guess I could do loads of things with that half, for sure. But I just dont really consider it mine in the first place, since I dont see, beyond the technical / economical machine-related dimension of it all, why I should get the income I get in the first place. When others who work as hard get less. (And mind you, it's not even like I'm super rich or anything - in Holland I was in the bottom 20% income bracket, here I dont know, I'm guessing I'm probably at one-point-something times the average wage.)
All of this to say that I have only been reinforced, over time, in my conviction that the inequality itself is an injustice, apart still from the obvious first priority of getting the poor to be better off materially period.
To pre-empt an obvious response to that, inequality is also, of course, a necessity, as it spurs on individual ambition, education and inventiveness. But I believe that that practical virtue is no longer at stake beyond a certain level. If you can earn two, three or six times as much by educating yourself, working harder and coming up with inventive ideas, you will certainly be more motivated to do so. But does it really make any difference anymore whether you can earn 60 times as much or 600 times as much? Would Bill Gates not have worked as hard as he has if he'd "only" earned 1,000 times as much as your average guy, rather than 10,000 times as much? There is no rational sense, nor sense of just deservance, behind the spiralling inequality anymore beyond a certain point. Whereas left to itself, the capitalist system does appear to only spiral the contrasts ever further out and out.
Apart from violating an innate sort of sense of justice and fairness, the kind that kids nowadays are taught to repudiate as childish once they reach their working years, there is also increasing evidence that it's simply not healthy for society. I am on slippery ground here, because of a lack of data, on my part in any case. But one thing that caught my attention a while ago was an article about the still experimental discipline of "happiness studies" - research attempting to survey and measure the experience of happiness. Results found showed that there was no difference between rich countries and poor countries. Some of the richest countries had low self-reporting of happiness, while some of the poorest countries had a high proportion of people describing themselves as happy. But the situation wasnt inverted either - there was just no pattern to it.
However, there was a correlation between the experience of happiness and the distribution of wealth. Relatively egalitarian societies had happier respondents than countries with sharp contrasts between rich and poor - regardless of whether they were rich (say, Sweden versus the UK) or poor (the examples escape me).
Though I have no link, this finding echoed for me findings of my own modest Masters dissertation (or whatever the term is in English). The subject was wholly different (political mobilisation on ethnic grounds), but the pattern I found then was that people would not mobilise (and protest) if they were doing badly in an unchanging way, or, obviously, if they were doing well consistently. They mobilised when they perceived a threat of their social/economical status worsening, or, paradoxically, when they saw a chance of it improving (and were triggered into action by anything that made them anxious about "missing the boat"). It was not deprivation in absolute terms that provoked mobilisation, but anxiety when there was a threat or chance of flux, downward or upward.
The liberalised market economy, with its evisceration of life-long jobs or even professions, its increase of temporary, low-security jobs, its expectation of the worker's perennial mobility (move states, move countries), its abolition of much of the state-provided "safety net", and its ever upping of the ante (rise higher, fall deeper), may be the perfect model for creating maximum material wealth, for a country as a whole. But apart from the obvious question/concern over whether the lower incomes benefit from this ever increased wealth at all, does this economy of anxiety and insecurity as well as opportunity really make us happy?
It does the winners, the people who are confident, talented and inventive enough to know that they'll always find a way out and up. But call it jealousy if you will, the way some rightwingers do, but many people get unhappy at the sight of the sheer lottery of it all, the way that being born with or without the right talents, into the right family environment of imbubed social skills, educational displine and networks of contacts or into the opposite, in the right neighbourhood or country or the wrong one, can catapult people up into relatively secure prosperity or hurtle them down in challenging environments where only the most steeled succeed. It's not fair - not if one's moral compass goes beyond Darwin's survival of the fittest.
And thats where those old-time socialist, social-democratic and mainstream christian-democratic politics come in. For many decades, at least since the thirties, if not centuries, back from before the French Revolution, whole mass movements of people have thought it only normal to work and fight to make the way we govern ourselves, collectively, as nations or democracies, more fair. Considered it only normal to think that, as societies, we have the right to tinker with "how the [economical] system just works" to better fit our values - including our values about what is fair. And yet now we are to embrace the way the system works not just pragmatically because it yields the better total $ results, but as some kind of moral measure of its own? To consider the numbers that the play of supply and demand ends up spurting out from one year to the next as the proper measure of what we individually "deserve", and woe those who want to redistribute it a little more fairly or evenly?
Thats not where I come from, I guess, and I wont.
3.) What programs/benefits would you initiate if a 70% rate was put back into effect?
For random example,
- Guaranteed basic health care for everyone, whether poor or rich, on welfare, a temporary job or a long-term contract. My friend is from a welfare family, where there was no money to afford regular visits to the GP, so instead, if anything came up, they would wait until it was bad enough to get (free) help at the hospital emergency care. Hell, you'd even earn much of the investment into a national, low-cost health care insurance back just by the way it would promote cheaper, preventative care and deburden the emergency service. (But thats a wholly different thread.)
- Making the bottom income category tax-free (if it isnt already, situation differs per country), and lowering taxes for the lower middle class and average-incomes.
- A system of affordable (government-built or just -subsidised) housing. Say, 10% or 20% of the housing, so that even those who are hardest up (or for that matter, f*cked up most) dont end up on the street or in shantitowns (like the Roma here). Being in the poorest 10% and having no money for any "luxury" spending is already punishment enough even for the lazy or stupid, people ending up homeless doesnt encourage them any further to do better.
OK, thats just three, but this here Internet cafe is closing.