(Mr. B. enters the washroom, obviously seeking relief.)
Is my personal Stall #8 ready, Selig? Ready for immediate use?
It’s ready, sir. Though still locked. I thought first I’d discuss an idea with you. About income inequality.
Love to chat with you about that, Selig. First the stall.
But sir, you’re always saying that hearing from little people like me is the most important part of any great leader’s job.
Yes, usually it is. Just now, however…
It’s a very simple idea, Mr. B.
Dear God! Tell me your idea for heavens sake, Selig, then unlock the door to my personal stall.
I knew you’d be interested, sir. Here it is: Income inequality in and of itself is not a bad thing. Hard work, talent, and initiative should be compensated generously. Big earners also have enough money above their own needs to invest, which builds the economy.
Obviously, Selig. Can I get into my personal Stall #8 now?
Not yet, sir. Too much income inequality, however, that doesn’t trickle down enough to the middle class, the group that buys the most goods and services This not only makes them poorer, but doesn’t provide the wherewithal to animate an economy based largely in consumption. It also keeps potential investors from investing in job-producing new economic activities.
Wonderful, Selig. You’ve been reading Paul Krugman in the New York Times. I’ll pay to renew your subscription if you unlock Stall #8 very, very quickly.
I will, sir. But I’ve only described the problem. Do you want to hear my solution?
I’m dying to hear it, Selig. Really, really dying. Get on with it man.
Here’s the solution. Raise the top tax rate from 39.6 percent, paid only by top earners, to 44 or 45 percent. Then use all the new revenue generated, ALL of it, sir, to lower tax rates paid by middle class workers. This will allow them to spend a lot more, animating the economy in the process, reduce poverty because the biggest cause of new poverty today is people falling into it from the middle class. It would also spur investment because investment flows into areas that promise the most profits, and the most profits would now be where an enriched middle class does its increased spending.
Good, but no cigar, Selig. First, because it’s a tax increase and that’s a no-no.
It’s not a tax increase, Mr. B. The total tax bite remains the same, it’s just reallocated from the under-taxed top to the over-taxed middle.
It’s class warfare, Selig.
No, sir. Every class of earners benefits. Top earners pay more in taxes, but those top earners who supply goods and services to the middle class more than make that up in extra profit.
Then who loses, Selig?
Economists who work for conservative think tanks, CEOs who pad their own bank accounts by pushing up their company share prices with Fed-funded stock buy backs, and Wall Street derivative peddlers.
Let’s not forget one other category of losers, Selig.
Washroom attendants who would rather philosophize than provide keys to bathroom stalls.
I’ll open yours immediately, sir.
Very wise, Selig. And one other thing.
Leave the economic policy-making to people who have paid their representatives in Washington to make it in an appropriately top-favored manner. Because, my friend, no matter how you vote and how sensible your ideas, this is the way it’s going to be.
(Michael Silverstein’s new Book, The Devil’s Dictionary Of Wall Street, is now available from Amazon as both an ebook and in print form)