Soak the Rich (or Class Warfare 101)

When CNN is questioning the validity of a Democratic plan to soak the rich, you can be assured that is really and truly is a bad idea. That's not a very sound rhetorical basis upon which to base an argument, but given the Mainstream Media's slavish devotion to all things Obama, it is a valid one.

For those earning an income close to the U.S. median income* of $70,354, it might seem fair to tax the "bonuses" of those greedy banker-types. However, one must keep in mind three very important factors:

1. Much of the compensation which these individuals receive is based on contractual performance bonuses. Is it the government's role to step in ex post facto and punitively tax bonuses that have been earned for expected performance, just because the word "bonus" sounds like something extra?
2. The purpose of taxation is to generate revenue for government programs, not to punish those who populist leaders and demagogues feel that it is in their best interest to pillory on any given day. Politicians like Senator Chuck Schumer (D-NY) have made their careers by finding the Villain-Of-The-Day™ to flash in front of the cameras and capture headlines. None of these politicians are truly outraged by these bonuses, since they are just the sort of fat cats that seek preferential treatment for themselves.
   
3. Giving in to the urge to "soak the rich" proves that one's character is of insufficient fiber to combat the jealously that populist leaders (such as Schumer) are trying to invoke through their phony outrage.

The United States of America will be far better off when all Americas stop worrying about what their neighbor earns, and starts worrying about what they can do to increase their own earning potential. Punishing a successful banker out of jealously is not only morally wrong (cf. that pesky 10th Commandment) but is also greatly injurious to a system which is designed to reward great effort and productivity with great compensation.

That which you punish, you receive less of. That which you subsidize, you receive more of. If we punish financial professionals for their hard work (regardless of the current financial crisis), then we will receive less of their labor in the future. If we continue to transfer money from the wealthy to those on the dole, we will only create larger throngs calling for the dole.

In the end, this remains a fundamental issue of returning to the Foundations of our Nation and implementing the Judeo-Christian ethic on which this great Republic was founded.


* U.S. Median Income for a 4-person family for the period of October 1, 2008 through September 30, 2009 (source U.S. Department of Health & Human Services).