The Biggest Problem

As we enter the first week of sequestration, the talking heads on various talk shows are lining up people like Bill Gates to discuss this issue. It is interesting that most of the people with strong opinions on this subject are very wealthy.  It is safe to presume that the opinions voiced in both print and broadcast media come from the people at the top of the income ladder.  While there is consensus among them that the problem lies with “entitlements” they limit their definition of entitlements to Medicare and Social Security.  No one has made much of those receiving their income in the form of carried interest as receiving an entitlement in the form of a tax benefit.  People using a home mortgage interest deduction to pay the interest on a car purchase, a child’s tuition, or pay down credit card debt do not consider that interest deduction an entitlement.  Corporate CEOs who have been able to have their companies amass untaxed profits offshore do not consider those tax havens to be entitlements, either.  Nor do those CEOs who are compensated in various forms that allow lower income taxes on their compensation or allow the avoidance of payroll taxes consider their benefits to be entitlements.  The most interesting aspect of all of these discussions is the conclusion that those who would be the least dependent upon entitlements like Social Security, while paying a far lower percentage of their compensation than the average recipient of Social Security voices the opinion that benefits should be lowered or delayed or reduced in some manner or another.  Where the CEO with a million dollar income may have less than ten percent of his or her income subject to a payroll tax the average working stiff has one hundred percent of his or her income subject to FICA.  That same CEO with a defined retirement benefit and a golden parachute protecting his or her job decries the average working person who has experienced a promised pension converted to a 401K, dependent upon contributions and is lucky to get two weeks severance when jobs are exported for lower wages.  The biggest problem we face is not entitlements but the inequity between the top and the rest on the income ladder coupled with the fact that four hundred of the wealthiest in this country have enjoyed over ninety percent of the income growth over the past twenty years.  The biggest problem is those with money and influence have managed to suck the life out of everyone else and there are not enough of those with money and influence who are willing to pay their share of the costs of government nor to create the necessary demand for products and services to get the country back to work, increase the tax base, and put an end to the entitlement bullshit.