Defining the Rich
During the Saddleback Forum, Rich Warren asked candidates McCain and Obama to define what it means to be rich. Obama gave a very sober, responsible, straightforward answer:
I haven’t sold 25 million books, but I’ve been selling some books lately. (Laughter.) So I write a pretty big check to Uncle Sam. Nobody likes it. What I can say is is that under the approach I’m taking, if you make $150,000 or less, you will see a tax cut. If you’re making $250,000 a year or more, you’re going to see a modest increase.
Obama deserves points for specificity, and for making a frank case for a more steeply progressive income tax code.
But as an aspiring postmaterialist (that is, as one who aspires to a Buddhist-like detachment from the obsession with status and consumption), I was actually very impressed by McCain’s response — a response that has been ridiculed, but that I think contains a centrally important truth.
Some of the richest people I’ve ever known in my life are the most unhappy. I think that rich should be defined by a home, a good job, an education, and the ability to hand to our children a more prosperous and safer world than the one that we inherited.
One of my favorite recent books is China’s New Confucianism by Daniel A. Bell. I know very little about Confucianism, but I was struck by the emphasis on relationships — how a dense web supportive, nurturing relationships is central to human flourishing, and how the inequality that matters most is the inequality in the quality and the simple quantity of relationships in which we’re embedded. Like most people in my family, I have a depressive streak. But, by and large, we Salams are also pretty gregarious. Every time I’ve been at a low ebb, when I’ve alienated a lot of the people closest to me, I’ve always had at least one comrade who’d lend me an ear. I’m thinking of one night in Porter Square in 1999, when a friend dragged me out of the fetal position underneath my desk and made me walk with him to a Dunkin’ Donuts at 2 AM. Then there were the evenings spent, post-breakup or other miscellaneous minor trauma, belting out the song “Ante Up.” The image is cringe-inducing now, but boy, it sure did help at the time. Some think of this kind of thing as trivial: it’s not the serious stuff of politics, it’s sentimental pap, etc.
Yet it should be obvious how this impacts our ability to achieve our goals. Consider the intergenerational transfer of wealth. Some years ago, I recall reading an article — in the NYT or New York — about parents of young children who found that other parents were spending beyond their apparent means (on, for example, private schools), and discovering that the mysterious largesse was coming from the fortunate parents’ grandparents. Slap on the inheritance tax, you might say! Well, that’s one thing to do. Leaving aside that straightforward policy lever — and by the way, inheritance taxes are easily dodged — this reflects on the power of the extended family. Or who can find a babysitter on short notice, to work that extra shift? This logic extends to those struggling at the bottom rungs of the labor market to those at the top.
So you have to wonder: are our social welfare institutions designed to encourage sociability, or to insulate individuals from the costs of a lack of sociability? In The Homeless, Christopher Jencks argued that though the choices faced by the chronically homeless are very constrained, there are often choices: a resistance to the dictates of immediate family members, to curb appetites, etc., often accounts for reliance on The System. This is oversimplified, obviously. And any reasonable conception of social citizenship rights aims to protect individuals from some of the petty tyrannies of family life and the small Winesburg-like town. But when we think how the welfare state works, I hope we can keep in mind that we want it to cultivate rather than undermine the qualities — empathy, modesty, generosity — that lend themselves to stable, peaceful societies.
Perhaps McCain was making a banal point about envy. If you have “a home, a good job, an education,” you’re doing pretty well and you should hardly complain about other people having bigger homes, etc. Being a sentimental sort, I actually don’t find this banal at all. But I’d go further, to counsel people who are primarily oriented towards primitive accumulation, shall we say, to reevaluate. I suppose that’s not the job of a president. At the same time, when do we ever have these wide-ranging public conversations across boundaries of denomination or sensibility outside of the spectacle of presidential elections?
McCain continued:
I don’t want to take any money from the rich. I want everybody to get rich. (Laughter.) I don’t believe in class warfare or redistribution of wealth. But I can tell you, for example, there are small businessmen and women who are working 16 hours a day, seven days a week, that some people would classify as, quote, “rich,” my friends, and want to raise their taxes and want to raise their payroll taxes.
There’s something here. The so-called “middle-class millionaires” are in many respects a very appealing class, and they help drive economic progress. I suppose I’m not totally averse to raising their taxes if there is a good reason. Still, I think McCain handled himself pretty well.
Inheritances were a huge theme in 18th and 19th century literature, but the whole subject has dropped out of the range of what you talk about in polite society. But, inheriting money is still a big deal and it’s only going to turn into a bigger story.
— Steve Sailer · Aug 20, 09:12 AM · #
Your point is well taken. Incidentally I’d like to hear your thoughts on the inheritance tax, which I strongly support (as a principle, I’m not sure about the specific mechanisms in the US). It seems like a tax that’s both economically efficient and socially just. Also I should add that in my ideal tax system, each major economic area is only taxed once, so the inheritance tax is the only form of capital tax — replacing cap gains.
— PEG · Aug 20, 09:19 AM · #
Right – so do tell, what policies result from such a sentiment? A 35 hr work week? I mean, look at this last quote – if McCain really wants everyone to be “rich,” in his sense, then why is he concerned with keeping taxes low on those who are so obviously rich only in the “superficial” sense of having lots of money?
— berger · Aug 20, 10:44 AM · #
I believe this was the reason Socrates never cared to dress in more than rags.
— Chris · Aug 20, 12:56 PM · #
… by the way, inheritance taxes are easily dodged …
This is frequently said, but it is not true. (It is true that you can avoid estate tax entirely by giving your estate to charity, but that’s not really what I’d call a “dodge.”)
— alkali · Aug 20, 01:23 PM · #
This is the question Rick Warren asked:
‘Okay, on taxes, define “rich.” Everybody talks about, you know, taxing the rich but not the poor, the middle class. At what point — give me a number. Give me a specific number. Where do you move from middle class to rich? Is it $100,000? Is it $50,000? Is it $200,000? How does anybody know if we don’t know what the standards are?’
Note that this is a question about taxes, not an invitation to muse philosophically about whether money buys happiness. This is why McCain’s response has been “ridiculed,” and it would be nice if you would at least acknowledge this.
And regarding taxes on small business owners, see FactCheck’s writeup on McCain’s absurd misstatements: http://www.factcheck.org/elections-2008/mccains_small-business_bunk.html
— JimmyM · Aug 20, 02:28 PM · #
I second JimmyM. McCain didn’t answer the question seriously. His funny answer was $5mil. Maybe he isn’t joking. So do you support McCain’s and Bush’s Tax policy? Mr Reihan. Sounds like you do. How do you plan to reduce America’s debt? Take some money out of the gigantic military spending?
— yugan · Aug 20, 02:39 PM · #
McCain’s answer hardly counts as a definition! What is a “good job” exactly? And how does one measure the “ability to hand to our children a more prosperous and safer world than the one that we inherited”? And finally, what policy proposals come out of this definition of being rich?
— scritic · Aug 20, 02:45 PM · #
Social networks can cut both ways though. Michael Vick was brought down by his social network. The Amish have a strong social network, so strong it prevents individualism and individual advancement.
— Bill Harshaw · Aug 20, 03:17 PM · #
I like the positive and possible thoughts about creating a network of mutually nurturing relationships and practicing detachment from excess material wealth.
— Joules · Aug 20, 03:50 PM · #
I second JimmyM. This is a transparent (and fundamentally dishonest) attempt by McCain to avoid the question and hide his actual policy proposals.
— peter · Aug 21, 03:12 AM · #
JimmyM,
What’s wrong with Rick Warren asking about tax rates? He’s also an American citizen, and any informed citizen ought to be able to ask a candidate for president about policies he’d pursue as president.
Besides, the issue of tax rates has been with us since, at least, the 1920s, and lower marginal tax rates increase economic growth. This has been proven again-and-again-and-again, in country after country after country (assuming, of course, that the country has a solid foundation in rule of law and property rights). Lower marginal rates also increase tax receipts, also.
Yugan,
Weird name, man. Whether Mr. Salam (Reihan’s his first name, guy) endorses John McCain’s tax policy or not, you’d be BETTER-advised to read his book, “Grand New Party,” to find out what Mr. Salam believes about taxes.
scritic,
Not sure what a “good job” means, but it’s not McCain’s job to interpret and/or define it. People have “good jobs” that don’t necessarily pay very much (do teachers teach for the pay? I think not, on average).
Asking McCain to define that is like saying of Benjamin Franklin, at the Constitutional Convention, “Well, you’re telling us to ‘keep’ our Republic, Dr. Franklin, but what KIND of ‘Republic,’ as you say, should we keep, sir? Will you answer that, sir?”
Silly.
All a president can do, ideally, is to allow for maximum economic and political freedom consistent with the rule of law and natural rights and liberties. In other words, provide for “ordered liberty” to the best of his ability. Nothing more and nothing less.
Mr. Harshaw,
Social networks do not PREVENT individualism per se, but they can enhance relationships of any number of sort, economically or otherwise. Individualism can exist more or less in tandem with any number of social networks. As can individual advancement (the “WASP” culture of New England, for generations, anyone?)
Joules,
What EXACTLY is “excess” material wealth, sir? Please define.
Peter,
One thing about John McCain is that he’s not one to HIDE anything, including his “actual policy proposals.” Go to JohnMcCain.com and get back; he lays everything out there. You may disagree, but, as many GOP-ers know of Sen. McCain, he’s not one to hide ANYTHING!
Sen. Obama, Mr. Opaqueness himself, though, on the other hand…..
The point of ALL of this is on the topic of defining the “rich,” it always and everywhere varies, and varies over time, in this country.
Life is so much, much more than material things, though economic growth, entrepreneurship, dynamism in the economic life of our nation, etc, should be encouraged always and everywhere. Many of the problems we have in society (not exclusively, but in places) arise, generally from a LACK of individual work effort and responsibility.
All a president of the United States can, and should do, is everything that he can to lower those barriers to the optimal realization of every American, consistent with the rule of law, possibly maximum economic efficiency, and ordered liberty. Everything else is immaterial and not worth our precious time on this earth.
Best, all.
— MA · Aug 22, 06:22 AM · #