Just as capitalism is part of our democracy, Andrew Cotto writes, so is fairness.
I heard it on the news while I was getting ready for work. Mitt Romney had just released his taxes from 2010. The numbers were being parsed from a myriad of angles. Whatever. I was busy (and late), and not overly interested, but a few facts from Romney’s tax report hit me pretty hard:
First, on each single day of 2010, Mitt Romney roughly made what I made over the entire year. That was somewhat sobering. Now, don’t get me wrong. This is not the “class envy” of which Mr. Romney speaks. I don’t envy his or anybody else’s wealth. I’m not of the ‘eat the rich’ mentality. This is America. Capitalism is a part of our freedom and part of our greatness. From my experiences with people of all social classes, there’s no correlation between character and income. People are people. And people are free to not only do what they chose for a living but also determine success by their own standards, and if success to them is defined by wealth, so be it. That’s not my choice. I’m a teacher. I have plenty of lucrative professional options, but I choose to be involved in education; therefore, I accept the long hours and the little pay. But, man, my annual teacher’s salary in one day? Something’s wrong with that.
The second fact bugged me even more. Mr. Year-a-Day-Income paid less than half the tax rate that I paid. The reason for this is that Mr. Romney’s income was generated through investments, and investments are taxed differently. I get the argument that the money used to invest had already been earned through other means that were subject to standard income taxes. But, come on. You don’t really work when you invest. You gamble, basically. In Romney’s case, he didn’t even pick the horses. He has a blind trust that does it for him (by the way, blind-trust-guy: nice work, and, call me). And this favorable tax situation doesn’t even factor in all the loopholes the wealthy are able to exploit; all the offshore nonsense that goes on in the Cayman Islands and other places where wealthy Americans hide their money. Now, there’s something seriously wrong with that.
What does this say about our country when the extremely wealthy get special treatment? Just as capitalism is part of our democracy, so is fairness. And there’s nothing fair about the affluent—and the corporations and hedge funds that sustain this affluence—playing by different rules. What does one do with all that money anyway? More investing, I guess. Imagine the difference it would make in America if loopholes were closed and tax rates on investments were equal to regular income. Consider directing these funds towards education and the difference it would make in the quality of students America produces (and the quality of life those students subsequently enjoy). Education as an engine of advancement could truly be available to all of our children. We could add resources and shrink class size. Enrichment programs and healthy meals and special services could be available in every district. And, we could attract more of our brightest and best towards careers that pay in accordance to the effort. Imagine that? I, in my (fair to say) incredibly important job as an educator, might make in a year what guys like Mitt Romney make in two days. That seems fair.
About Andrew Cotto
Andrew, nice article. I agree with our need for quality education, and free education at that, and equality within a system of fairness.
The present system in our country is an oligarchy, a corporate ran and corporate owned government, whose only goal is to amass more power and money.
Human needs are not factored into the financial statement.
In order to serve the needs of human beings and to provide a great education to all of our children, and with that – great free health care including dental and vision – the goals of the people in this country must drastically change and the entire government change along with it.
Materialism and consumption, having let us down and leaving a bitter taste behind, we may look towards more lasting joy and happiness interdependent upon our family and neighbor, in an environment of cooperation, help and sharing.
We vote with our dollar and I vote that teachers get top salaries and all schools have new books and computers. There is much to do.
Dear Andrew Cotto,
I am a Hispanic scientist living on Long Island. I believe in Education and fairness. In 2009 I started a series of workshops to include undeserved minority High School students in publishable science research. On Jan 30 I was in Freeport high school to give an after-school seminar, which I hope will convince some of the students (90% Hispanic or African American) to consider innovation as a career goal. I devote 20 to 30 hours per week to entirely unpaid, volunteer work in education, motoring, and career advancement of minorities.
I will vote Republican in November — and I cannot understand how anyone who believes in fairness, education, children’s welfare, or minority issues would do otherwise. The Democratic party’s campaign against boys is very close to breaking the back of the next generation. No issue in the history of our nation can compare with this in terms of fundamental unfairness.
The democratic assault against boys primarily affects minority boys, especially Latino boys. These boys watch, heartbroken, as their female colleagues are invited to participate in an endless series of woman-only opportunities. In contrast, the boys are given a steady diet of institutional hostility and neglect. Those who fall out of line are treated with brutal and compassion-less “justice”. Those who attempt to hang on to their dignity or humanity are treated for their “maleness” disease with forced administration of amphetamine, Ritalin, or other personality-killing drugs. Those who break the law are thrown behind bars and forgotten. Those commit suicide are buried and forgotten.
I’m not trying to be contrary. I’m not trying to push my agenda. I find your position to be completely valid. – Just had to get that all out there from the outset.
I think a lot of us have certain issues that we just care about more. Yours is boys education and so you look at both sides and determined that the Republicans are doing more for your issue, and you’re voting for them. (I’m not saying it’s that simple obviously. I’m sure there are other issues that you agree with the Republicans on. I’m just saying obviously that it one that is extremely important to you).
I, on the other hand, will be voting Democrat. It’s not that I disagree with what you’re saying about the Republican party and boys education, it’s that I have my own Most Important issue. And for my issue, the Democrats are the way to go…and at the very least the current Republican nominees are most certainly NOT the way to go (for my issue).
I don’t quite know what I’m trying to say, except that maybe instead of saying that anyone with a brain will vote Republican (or Democrat) we should try to understand the motivations of the other side.
Here are the 100 things I don’t agree with the republican party about, in order of importance:
1) I think that high levels of income inequality (gini > 0.4) require government action. Republicans either like income inequality (a few) or think the market needs to take care of this issue (most).
2) I think the environment should be protected using market forces (tax policy). Republicans like market forces, but don’t care about the environment.
… (many other issues)
100) I believe that leagal abortion is the lesser of two evils, and should be discouraged but allowed. Republicans want abortion banned.
Okay right, yeah, that’s kind of what I’m saying. We all have certain issues that we prioritize. You have placed boys education at the top of your priorities and so you vote Republican. Because of what my top priority issue is, I will be voting Democrat. But when you say this:
“I will vote Republican in November — and I cannot understand how anyone who believes in fairness, education, children’s welfare, or minority issues would do otherwise.”
It sounds like you’re shutting out any opposing opinions. Not just opposing opinions about boys education (which I agree with you on, by the way). But you’re shutting out the possibility that someone else might hold something else as more important than education. And I’m suggesting that maybe we should try to understand where the opposite side is coming from, instead of suggesting that they don’t believe in fairness because they don’t vote the way you do.
That’s all I meant.
Or wait…are you assuming in that comment that my issue is abortion and that’s why you pointed out it’s bottom of the list for you? My issue isn’t abortion. My Top Priority Most Important Issue is LGBT rights. It’s personal, and as such I care about it deeply. I try very hard not to be a one-issue-voter, but when it comes to that I pretty much am. So if (when) we have equal rights, then I’ll be reconsidering who I vote for. Until then, it’s pretty much sealed.
The best student I ever had was gay. I learned a lot of things from her, and I think LGBT issues are a moral imperative, similar to the Ritalin issue. The two issues are very similar actually, in that a vulnerable group is violated for the sake of electoral expediency. Both are issues of fundamental human dignity and equal protection under the law. You’ll get no argument from me. I understand now, and I wish you every success.
Personally, I don’t think “fairness” is a good strategy in these cases. I think the word “fair” implies a sliding scale. Issues like forced administration of drugs to cure “toxic masculinity”, and legal discrimination to cure “sexual deviance”, have no gray component. It is very simple: right and wrong. These are not fairness issues, they are human dignity issues. There are no gradations, no half-way measures, no compromisses. As long as it continues, it is a national disgrace.
Yeah, I could go on on and on about LGBT issues…but I won’t because this really isn’t the article for that.
Yeah I agree with what you said about ‘fairness.’ I only actually used the term in quoting you. lol. Anyway, I personally wouldn’t use the terms ‘right’ and ‘wrong.’ (that’s more to do with the fact that I’m a moral relativist, but that’s another topic for another place). Mind you, I don’t really have any replacement terms because I do believe that they are human dignity issues and that there can’t be any half-way measures or compromises.
Anyway, this is where I think there’s a flaw in the system (well one of them). Theoretically, you and I should be at each other’s throats about all things political. We will be voting on opposite sides, after all. And yet we actually seem to agree on a lot, our priorities are just a bit different. With only two parties we’re forced to choose sides. There is no party that supports boys education and LGBT rights…and yet those are not two mutually exclusive issues. The party that is for the death penalty, is against abortion. The party that’s (supposedly) for fiscal responsibility, is also for huge social legislation. etc….etc….
I’ve found in my short time here, that very few Republicans (or Democrats) are actually as hardcore as we might think. Usually someone has a specific issue (or set of issues) that they find to be the most important, and that’s who they vote for.
Mind you, if I were into conspiracies I’d say that the Democratic party is putting off doing anything for LGBT rights because they know there are a lot of LGBT people out there who might not support the party whole-heartedly after we get those rights. But I don’t really believe that.
“personality-killing drugs”
Amphetamines kill personality or the others?
I’m not sure whether he was referring to how they kill a person’s personality on a short-term basis. Like how that’s the point of something like Ritalin…to alter a child’s personality. Or maybe he was talking about the long-term affects of taking a drug – as in, how it can alter your brain chemistry permanently.
And that doesn’t even take into account the ways powerful drugs affect children (versus adults). ADHD is over diagnosed, and it’s mostly over diagnosed in boys. Feeding a kid drugs so that they behave in a way that is more socially acceptable could have devastating long-term consequences, not just physically, but also in terms of their personality.
Ah ok, misdiagnosis would be a major problem since the pills are to raise dopamine levels in those with ADHD/ADD so on a normal kid that will probably be too much. I found my anti depressants changed my personality a bit and made me numb, but my adhd meds (Dexamphetamine) just simply make me focus and no change to personality, ritalin also didn’t seem to change my personality as a kid either but that’s most likely because it’s a genuine case and not a case of being misdiagnosed.
The drugs should be administered as part of therapy and under the appropriate conditions, to help combat the negative symptoms that can have a very detrimental effect on a person’s life, not simply to change behaviour to a more socially acceptable level.
Right, exactly. Now I don’t want to speak for Anthony (but apparently that’s what I’m doing), but I think that was kind of his point. That drugs are being thrown at kids (especially boys) as a way to make them more socially acceptable.
Has anyone considered offering those children who refuse to sit quietly stuffed into a tiny seat for hours an alternative setting?
Perhaps the classroom as it is structured is not suited for all children, and rather than drug the children to meet the needs of the school, would it be possible for the school to find a better way to address the needs of those children?
How does a child with ADD, ADHD prefer to learn? What is best for the child and how can we provide that? Maybe that child learns by doing or in short spurts, how can we find out?
I realize that I am stepping outside the system and seeking an entire new way to see and teach children, with the needs of the child in mind.
One reason for taxing investments differently is that we consider investing in business to be a social good. However, as many investors will tell you, some of them quite poor, not all investments are winners. In order to get investors to put money into businesses which might fail, we increase the return on those which succeed by taxing them less. Say you end up making the equivalent of 5% on your investment in a business. If it’s taxed as ordinary savings, it may as well be ordinary savings, not the more useful investment. So to attract investment, we increase the possible yield by taxing it less.
“Fair” used to have a meaning. Not sure it means anything any longer but “I want what I want when I want it and anybody who tells me about costs to others is a Big Meanie.”
Education is not “free”. And, afaik, nobody is keeping kids out of public schools, no matter how good or bad they may be.
Dental and health care are not “free”. They would be paid by the taxpayers. Now, if you figure out a way to not be a taxpayer, I suppose you could call it “free”, but the taxpayers paying for your health care and dental care have less money to spend on other things, like starting a business that might hire you. But that’s no biggie. If they hired you, you’d be a taxpayer, one of the chump class.
Good lord. “free” health care? Where have you people been since econ 101?
“Education as an engine of advancement could truly be available to all of our children. We could add resources and shrink class size… I, in my (fair to say) incredibly important job as an educator”
Americans have a lot bad values I disagree with: consumerism, belief in education, belief in science, housing and health care, overvaluing of sex, belief in independence, egoism …. the list goes on. I don’t think your job is incredibly important. I think the education system SUCKS. I don’t believe in it and I am amazed at how much Americans believe in it. The founding fathers who are the greatest generation of Americans who ever lived were far less formally educated than the average middle class American. A person may need a little formal education in their lives but our system is ridiculous.
I am trying to figure out a way to ask a question without sounding like I’m attacking you, because I’m not. I am just very curious. Curious to the extreme, really…and so I can’t help but want to ask you what I’m about to ask you. I am so totally not trying to argue. Actually, regardless of your answer I won’t be replying except to say thank you for your answer. But, like they say, curiosity killed the cat.
I was wondering two things: where are you from? And what is your own level of education?
I would like to stress that I’m just trying to understand your perspective. I would like to see where you are coming from. Feel free not to answer if you don’t want to.
Dear people, have you not yet realized that the Republican and Democrat party are both arms of the Rulers – the Major corporations – and they are not going to help you at all unless it is by accident!
Why are you relying on a group of power-elite mostly men to determine the well being of your children and family when it is our responsibility to do that?
Why are you not seeing that we must come together as a people and do these things and help one another reach these goals.
The schools are so poor the children are self-taught via the internet.
Come on, we cannot rely on the Kingdom to do anything for us, as the King and his assistants are all out for themselves.
As a a father I taught my children the truth about Columbus and when Columbus day came around they were able to inform the class what a horrid day it was and we should be in mourning. The teacher had to agree.
Passing on our responsibility to a Monarchy or tyranny or elite will never ever do us people any good. I look forward to building our future together with all of you, and helping one another to achieve what is good for us. A true democracy with care and kindness and human well-being in our hearts.
where are you from?
Canada. Although it might as well be America since Canada is pretty similar to America except that on some things we are a tiny bit smarter than you.
And what is your own level of education?
Two Master Degrees.
Thanks. Like I said, I wasn’t trying to be confrontational with those questions. I was just curious to see what your perspective was. So thank you for answering.
Now I am curious and I would like to ask a question. What were you expecting?
I honestly wasn’t expecting anything. You’re use of ‘our’ at the end of the post made me think you might be from the US, but your use of ‘Americans’ at the beginning suggested you were from outside the US. But then the ‘our’ could have just referred to the modern western system and not the US system in general…so that’s why I asked.
As for the education question…I was just curious whether you were someone who had experienced the education system first hand and had found it lacking, or whether you were someone was making a judgement about it but hadn’t experienced the system himself. I’ve just run into both and I was wondering where you fit in.
Yes, the current system which was developed to train children to use the machinery in the industrial revolution still prepares them to work in factories and the really good teachers must fight the administration.
We have an archaic education system that we as parents can change. It was changing for the better many years ago when the Monarchy – oligarchy rulers, decided it was too threatening to have an educated populace so they dummied it down and feed it pennies.
Good teachers are needed and they become role models in our community along with good parents and good people.
You were on track when you said that there is no correlation between character and income, and that people are free to define success on their own terms. (There’s an important correlary to that also, which you missed. We’re also free to feel like failures on our own terms too, and that includes Gov. Romney, who may indeed feel like a failure if he is not nominated. But I digress).
You went off the rails with the idea that income should be compensation for work and the refex-idea that income should be taxed progressively. Both of those assumptions should be considered debateble. Equally valid are the ideas that Income could be for value given and excessive tax is indistinguishable from theft.
But double taxation on investment income? How about triple, or quadruple tax? Just how many times do you wish to tax that money anyway?
Sorry. Invested money creates goods, services and wealth. Taxing that pool only dimisished the number of goods, the quality of services and everyones wealth. The people most impoverished are the very people such taxation is supposed to help, and you should realize that such “government help” was a lie.
Even social security, a ponzi scheme by another name.
There’s an interesting education blog, “joanne jacobs” which is on Instapundit’s blogroll. They’re mostly professional in the ed biz.
Their concern is that pub ed is trying to get everybody into college–one reason for the vast increase of remedial actions by the colleges themselves–and little or no voc ed.
The idea that kids are being trained for factories would surprise a lot of employers whose question is…where can I find some.
Resources are disproportionately directed toward big-city schools. NYC. Chicago. LAUSD. Results aren’t all that good.
Anyway, for ed topics, see Joanne Jacobs.
So I’ll finally reply to the actual article instead of just the comments: I think using the term ‘fairness’ is problematic. I think the term ‘equity’ or ‘equality’ would be better. In the case of the way taxes can be manipulated by the rich, I find the problem to be one of equity. There are a million loopholes that rich people can hire professionals to find and exploit. Meanwhile, Joe Shmoe is stuck exploiting only the loopholes he can figure out himself.
Whether investment income should be taxed the same way as standard income tax is a separate, but related, discussion. The point that I take away from Mitt Romney’s taxes (and really the taxes of most rich people) is that they have greater access to the methods used to exploit the system.
Also, and this is a bit of a side-note, I think the tax code needs a bit of an overhaul. It’s filled with so much rubbish, it might be best to just dump it out and figure out something new.
Andrew, you start out by stating that you favor Capitalism and wealth, then proceed to fall into the liberal mantra about fairness, and spending. I know this site is mostly liberal, but it might be helpful to hear out a fiscal conservative. Please think hard about what you are saying, and understand the consequences of getting what you wish for.
Investment capital by necessity, must be taxed at a lower rate, regardless of where the money comes from. Most ventures fail in comparison to the successes. How many winning stocks do we pick as opposed to losers? Failure rates can be high. But for the one that pays off, it can be rewarding. However, the reward still has to make up for the losses on other ventures. If these risky investments do not pay enough in profits to cover the potential for losses, they are risks not worth taking. The consequences being, that start up companies will have a much harder time acquiring risk capital. That means less new businesses, less new innovative products, and less turnarounds. Higher reward should accompany higher risk.
Regular income is not risk capital. You go to work, you get paid. You pay a specific tax rate that is appropriately higher, than if you risked your wealth. Unless you lose your job, your do not lose your income. But if you risk your income, you could lose it all. You will not wish to pay the same tax rate, as if you had not taken a risk. You want the rewards for taking that risk, even if you did not work directly for it, as you so complained of Romney. You may as well just put your money into a Money Market, or CD. Your trade off is a lower rate of return for little or no risk.
And just for the record, Romney paid between 13 and 15% taxes on his capital gains. He also gave more than 4 million dollars in charitable contributions last year. CNN Money.com revealed that even with his 13 to 15 percent rate, it is still a higher tax rate than the income tax rate of 80% of Americans. I fear this fairness war we are obsessing, is horribly misguided. And in the end, we may erringly bring down our free market system, and turn it into some dis-functional and unsustainable half socialist, half capitalist nightmare.
And just for the other record. You are also misguided about our lack of education spending. The Mercatus Center, at George Mason University, as well as other sources have the statistics on how much money we spend on Education in America, per pupil. We pay more than any other country in the world, second only, (by a very small margin), to Switzerland. And our education still sucks. Only in America, can we have so little gain for so much buck.
Fair enough on the risk factor in investing, and not wanting to prohibit such capitalistic pursuits; I’d still argue that the rates are too low on investments and an adjustment in that amount wouldn’t stymie investing (what do money markets pay these days? or risk taking of any kind. What you didn’t address were the opportunities for avoiding taxes through loopholes/off shore arrangements, etc. Nor do you mention the write-offs for investment losses. The tax system favors the rich – bottom line. It needs to be changed, but not in a way that smacks of socialism (I love how conservatives scream “socialism” every time the status quo is questioned).
For the record: Romney’s charitable contributions are beside the point. He’s a Mormon; that’s where his money went as a matter of religious obligation. That’s cool. It’s moot for this conversation.
For the record (2): Our spending on education is not # 2 in the world when factoring spending versus # of GDP (we rank in the 30s). Take a walk into a NYC public school and show me where all the spending is. There’s no money. Teachers are out of work and/or grossly underpaid. Students are suffering from lack of services. Spare me the skewed figures.
Exactly how high do you think the gains rate should be? Can you give me a percentage? Also exactly what do you hope to accomplish by raising the Capital gains rates.?The amount of debt we have amassed is so biblical in proportion to any amount we can raise, that it is of no consequence in its effectiveness, except to perhaps make some people who feel it is unfair, feel better. But that is another fiery issue. I just have a real problem with tax policy changes that will be ineffective in the desired results, and an even bigger problem with policy changes that can have an unintended negative effect on economic growth.
As far as a conservative pulling out the “socialism card”, it is a justifiable argument. Wether you believe it or not, we are moving more towards a government controlled, centrally planned economy, which is the hallmark of any socialist economy. Don’t you remember the cover of Newsweek magazine after Obama got elected? “We are all Socialists Now”. Regardless of what the articles may say inside, the title states a certain comfort level in the premise. Socialism is a word and philosophy that is far more accepted than it ever was before. I am 57 years old, and the level of acceptance has grown many fold over the last few years, and it is something I had never seen before in my lifetime. It is painful for me to watch. As long as we accept its premise, it can happen. That is a fact, and there are growing numbers of people in this country who are okay with the idea of central planning. I am not. Centrally planned economies are the ultimate default threshold of any government. It has been that way for thousands of years. I guess people in power ultimately cannot help themselves, for power is just too tempting. Free market capitalism is the exception, not the rule.
Currently our tax system is being built to ultimately favor the powerful in government, and the mega rich who support them. Take a good look at the cronyism taking place. All this is happening, while us, the middle class continue to get hammered, while we watch our economic freedoms crumble around us.
A change in tax policy that is based on increases to certain people, rather than a simplification for everyone, will accomplish nothing more than shut us up for a while, until we get pissed off again that it didn’t work. Then we will call for more central planning and control as some sort of magic fix. Then the cycle will go on and on. 16 trillion dollars in debt is daunting, and there isn’t enough that anyone can pay to make a monetary difference in the budget or in our lives. But they will just keep us fighting with each other while senators and congressmen who barely had a pot to piss in when they joined congress, end up as multi-millionairs when they get out. The fairness horse left the barn trillions of dollars ago, and he has no intention of returning, until we reverse course.
How much we spend for education based on GDP as opposed to individual student is irrelevant. You need to compare apples to apples. For example, 10,000 dollars spent per student in a high GDP nation like the US is of no less value in its purchasing power than 10,000 comparable dollars spent in a nation with a smaller GDP. If I am a millionaire and I buy a 20,000 dollar car, and you have no more than 50,000 dollars to your name, and you buy the same 20,000 dollar car, we should both get the same value for our money. Yet countries all around the world, most spending less comparable dollars than us on educating each student, are getting a much better car. Our problems in education go much deeper than the amount of money spent. Great movie to watch is Waiting for Superman, which is a documentary on our education system. The director is no conservative. He also did Al Gore’s an Inconvenient Truth.
I am enjoying this spirited debate with you by the way. I think it is a debate well worth having.
No worries on the length there, NA. It did take me a while to read it though. We’ll have to see what happens. My feeling is that we are heading towards an economic system where there is more taxation on the wealthy and even more investment from said taxes put into schools, roads, technology, high speed rail, etc. I hear your points, especially with regard to cronyism and waste. I do believe you are conflating socialism with populism, but we’ll see, either way, how it works out…nice debating with you, as well.
Best Regards,
Andrew
Sorry Andrew about the length of my last post. Typed it up than posted it, and said” Oh MY God”. I didn’t realize it was so long. I will try to keep any subsequent posts shorter. Got a little carried away.
I am worried about this country’s excessive focus on fairness. Fairness is way too subjective a concept to leave it in the hands of bureaucrats. Are you noticing how the more government focuses on fairness, the more angry we are getting at one another? There is a correlation there. Unless we are all playing by the same rules, fairness ends up being in the eyes of the beholder. And depending on who the arbiter in power happens to be, your fairness gap is going to change who gets favored next, under the guise of fairness. What you may consider fair on one issue, I may consider unfair. However, if we both have the same rules to play by, there is no unfairness other than life’s challenges. The more individual rights we have, the more we are equipped to rise to those challenges. However, with individual freedoms, comes risk. We are going to fail from time to time. But in trying to “impose fairness” and minimize risk, individual freedoms have to be controlled.
Personally, I think it is unfair to ask any income tax payers to pay more in any taxes, Obama just proposed a budget that spends more than 4 trillion dollars in spending. OUCH! Even the rich don’t have enough to pay for that. The governments of western democracies have, and are still bleeding the producers dry in their quest for fairness, wether it be to end poverty, (7 plus trillion dollars spent so far in US), create overpriced jobs, dole out political cash to to favored districts, and now to failing businesses. I think a flat tax for everyone is the fairest way to tax people. No loopholes, no special favors.
Great article Andrew. Some of the tax laws clearly need to be changed so Glove, I mean Mitt, and other wealthy investors, pay their fare share. However, America never has been fair has it, just ask the native americans,african americans & women, among others…..
It seems pretty fair to guys like Glove, I mean Mitt. With regard to fairness in America, at least we don’t chuck our rock bands in jail for offending those in power…rock on.