Socialist When Poor, Capitalist When Rich

by golbguru on November 1, 2008

When you are poor you would like someone to share your financial burdens; you want to someone to give you some tax relief; you want someone to give your kids financial assistance to get through college; you want someone to bail you out of the financial crisis; it seems logical for you that the “rich” are taxed more - you call that graduated tax; you consider it fair that there are incentives/affirmative-action for the economically and socially challenged; the growing disparity between the quality of life in the rich and the poor bothers you; the concept of “free market” doesn’t always work in your interest; you find it surprising that CEOs are paid several million dollars a year while you can barely make your ends meet; you generally don’t like that the fact that health insurance is controlled by for-profit companies; and you want the government to have some control over banks/firms who handle your retirement money; you generally envy the “capitalists”.

When you are rich you want to enjoy all your wealth by yourselves; you think “poor” people are “poor” because they aren’t working hard enough to get “rich”; you think it’s unfair that you are taxed at a higher rate than the “poor” - you call that “spreading the wealth”; for you “charity” is only a means of reducing your taxable income - you generally don’t believe that “wealth should be spread around” so the concept of “charity” doesn’t really appeal to you; you are a staunch supporter of “free market” (but you still want the government to bail you out of financial mess - I don’t know what’s up with that); you recoil in horror because some plumber who earns more than $250,000 a year will pay about $3500 more per year in taxes; you think it’s draconian to limit profits or pay of any company or individual; you don’t care about the fact that health insurance is offered by for-profit companies - because you can basically afford anything they charge; you want minimum government involvement in anything that you are associated with financially; you believe that lack of government control leads to a “self-correcting” market; you generally hate the “socialist”.

The world isn’t black and white.

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{ 35 comments }

1 Tom Humes 11.01.08 at 6:16 am

Nice Site layout for your blog. I am looking forward to reading more from you.

Tom Humes

2 Rebecca 11.01.08 at 7:26 am

“When you are rich you want to enjoy all your wealth by yourselves.”

And yet, if you will notice, the very richest of the rich often turn out to be the greatest givers. The “merely” rich would do well to take note of the great philanthropists of our time. What goes around comes around.

3 BD 11.01.08 at 7:40 am

I disagree. I’m what most would call “rich enough” to fit your definition of a cqitalist, but I don’t blame the poor or hate paying taxes. I’ve seen enough of how young people get “rich” to know that it’s a combination of hard work with a healthy dose of either privilege or luck. A janitor working two shifts works as hard or harder than I do, but I had the privilege of living in an area with good public schools that set me up to go to a great private college (again, with a lot of hard work on my part), which set me up for a job that pays well. Please don’t assume that all of us who’ve “made it” think the poor deserve to be poor or stay that way!

4 golbguru 11.01.08 at 8:58 am

BD: Excellent comment … you get my point. I was trying to portray the extremism on both sides… and like you did, obviously, the world shouldn’t be painted with just two brush strokes. However, our leaders don’t seem to understand this - and so do a whole bunch of people who elect them.

Anyhoo.

5 stocks 11.01.08 at 4:55 pm

I’ve always had a fairly simple view of paying taxes, I’d not mind paying higher taxes, because generally that means I’m making more, and hopefully managing it within my means, so that taxes aren’t a burden.

6 Jim 11.02.08 at 6:42 am

It’s not so much that you currently are rich or poor that tends to influence your views. It’s how you see yourself in the future. Middle-class looking down = liberal. Middle class looking up = conservative. Or maybe I have the cause and effect backwards and the liberals tend to get poorer while the conservatives get richer.

7 Retired Syd 11.02.08 at 9:59 am

What’s really interesting to me this time around is that just about everyone I know (including myself) is in the category of people who don’t mind paying more taxes (and would probably be considered to be “rich”).

The ones who seem to scream “DON’T RAISE TAXES ON THE RICH,” are those whose taxes won’t be going up anyway!

Go figure . . .

8 Jeremy Day 11.02.08 at 8:15 pm

This is the truth on our perspectives. What I look for in a leader is someone who can look past all that, be objective, and make the decision they would feel is best for the American people. I hope for it, but I don’t count on it.

Cheers,
Jeremy

9 M H 11.03.08 at 8:53 am

Thanks for the interesting topic…

I come out on the conservative end of the spectrum. For context, my wife and I do well income-wise (we’re well above the average US household income), though we’re very far under the much-discussed 250K mark.

The rich should help the poor, as a matter of Christian charity. Our family seeks to do this through a number of organizations we support, including both our local church as well as a variety of agencies providing assistance both locally and around the world with physical and spiritual needs.

My concern with government mandating wealth redistribution is threefold. First, it is mandated, and in some measure takes away from the individual the joy of giving and seeing either directly or indirectly the positive results of that giving. Second, private charities (Christian or otherwise) generally are much more efficient in their operation and provide more effective help to those who really need it. Third, most private charities are much more fiscally responsible (by necessity if nothing else) than the government. The current national debt provides a troubling picture of our government’s ability to manage money. Would you give to a charity that spent a significant portion of what was given to debt payments, rather than to fulfilling the actual goals of the charity?

I want to help those in need, but would like to do so through organizations that I trust more thoroughly than I can bring myself to trust our government.

So, please keep in mind that there are some conservatives who truly want to help those in need. They simply have issues with doing so via the government.

PS: Yes, I realize that there are also some who simply wish to hoard even more for themselves. They may enjoy that for the present, but God will eventually hold them to account for that mentality.

PPS: Some may be surprised at the Christan emphasis in my response, but I’d be remiss in giving my understanding of what is best for our country without also giving my reasons for coming to this conclusion.

10 Retired Syd 11.03.08 at 9:17 am

Part of living in a civilized nation is that we make decisions jointly. That’s what our government really is, not some “it” out there, it’s us, through our system. So while, indeed, it could be said that our government isn’t as “efficient” at helping those in need, the government has a role in this because we the people have decided it’s important enough not to ignore as a society (through our government.)

To take another example: education. Yes, perhaps our education system has inefficiencies. Perhaps the answer is to take government out of the education business and let individuals pay for it themselves (and perhaps churches and other charities could pick up what people can’t afford.) But we as a society have decided this is an important area that we all want to “mandate giving.” So government has taken on this role.

Same with the military, public works projects, Social Security and Medicare, and many other “costs” of living in this great nation of ours. I don’t always agree with how my tax dollars are spent (wars I don’t agree with, for example), but I do believe in our system, in the fact that it’s made up of we the people.

We can point to “the government” and say how bad or big it is, but it’s us. The more of us that participate, the more it reflects us and our common shared goals. Churches and charities are great, but they reflect the desires and goals of smaller communities. We have this one great big community called the United States–we have rights, responsibilities and costs associated with participating in this community. I may not agree all the time with everyone in this community, but I believe in it, in the system, and in the government that we the people get to participate in.

So yes, I kind of do view paying my taxes (even if they do get “redistributed” to those darn poor people) as patriotic.

11 Golbguru 11.03.08 at 10:32 am

Jeremy,
It’s sad, but that’s what is going on.

Retired Syd,
I agree with your last comment.

M H: I appreciate your charitable tone. However, we the people elect the government - if we don’t have a government we can trust, it’s time for us to indulge in some introspection and take action.

The difference between small groups and government is that the government represents a great common will (and resources) of an enormous population (people of all religions, faiths, capitalists, socialists, Tom, Dick, and Harry) - as such it has a greater will to put things in action (at least theoretically) from an objective point of view - for the greater common good. If a government is kept away from taking such actions, I don’t understand (from a common man’s perspective) why we need a government in the first place - let people (and their small communities) fend for themselves and look after their own good - and we all know where that’s going to lead us.

12 stocks 11.04.08 at 7:39 pm

And the kicker is, while yeah, we don’t always agree on how the money is spent (for example-war) we still live in a great nation with alot of freedoms, and we actually have a choice in how it turns out, by voting on the issues that affect our lifes, financial or not…

13 used table saw 11.05.08 at 9:33 am

Thanks for this ‘heart of the matter’ article. I too don’t mind paying a little more in taxes if I’m earning a lot more.

14 M H 11.05.08 at 12:02 pm

Golbguru & Retired Syd, I appreciate the thoughtful responses to my earlier comment.

Regarding trust and participation, I agree that it’s our job to take action and seek to elect representatives we can trust. I certainly take that seriously, and cast my vote yesterday. Of course, the challenge is that so many of us have such fierce disagreements about which candidates we can trust and for what reasons.

Part of my frustration - and perhaps a tendency to see the government as “them” rather than “us” more than I really should - is due to seeing too many of those I support either not get elected at all or lose their offices to challengers. Of course, I realize there are other ways to get involved, such as writing to my representatives when appropriate, regardless of whether I voted for them or their opponents. This is perhaps an area where I need to get past a little of my own cynicism and move forward with what I CAN do.

Regarding small communities versus large ones and where certain responsibilities should rest: I don’t believe we should do away with a central government (I’m certainly no anarchist!), but I do think that the national government should not be handling fewer tasks than it’s attempting to at present. Some responsibilities should be handled by state and local governments, and others should be out of the realm of government entirely and be handled by private organizations (such as charitable organizations as I mentioned earlier, whether they be religious or not).

More localized control of some things has both advantages and disadvantages. Others have listed some of the disadvantages (fewer resources, and fewer people to back up what is being done). However, there are advantages as well. Different localities have different situations and needs, and more localized control allows for more location-specific planning and programs.

For example, the cost of living can vary widely between different states, and even different parts of the same state. This could have a huge effect on what appropriate minimum wages should be, and on a multitude of other programs, or lack of a need for those programs.

I’d better stop there, or I could get on quite a roll with examples… :-)

Thanks again Golbguru for the interesting topic, and all of you for the thoughtful and civil discussion.

15 Andy 11.07.08 at 12:16 pm

Interesting article and agree with mostof the principles outlined here. Good to see a different perspective.

16 stocks 11.09.08 at 2:35 pm

Concerning the cost of living, I’m here in california, gas is 2.45 finally, cigarettes are 3.80 mostly, bread is 1.07 for white, and houses are dropping like rocks, but historically, 2400 sqrfoot in colorado was 180,000, but in california, 700,000. that’s a pretty brutal difference.

17 Double Journey 11.10.08 at 11:48 pm

The world is not this black and white.

I was poor growing up. I was the kid that was, by far, on the most financial aid at my university. I never once was a “socialist”. I’ve always been a capitalist and believed that I am responsible for myself and nobody else. I’ve been able to pull myself up by my own bootstraps and am proud of it.

I believe it is this attitude, one I have always had, that has allowed me to achieve what I have already, and will continue to serve me well for the rest of my life.

18 Super Saver 11.11.08 at 7:52 pm

Golbguru,

I can see that you are laying the tracks for your political career. Your post equally appeals to liberals and conservatives, with both sides assuming you are aligned with their beliefs :-)

19 Moneymonk 11.13.08 at 9:45 am

I rather make $300k and pay $50K in taxes

Than to make 25K and pay nothing in taxes

20 Super Saver 11.18.08 at 5:27 pm

@ Moneymonk,

Shh… don’t say that in public too loud. Congress may hear you and decide to tax you $75K more and transfer it to the person making $25K :-)

21 kitty 11.19.08 at 10:49 am

“The ones who seem to scream “DON’T RAISE TAXES ON THE RICH,” are those whose taxes won’t be going up anyway!”
For many of us who are weary about raising taxes for the rich or especially raising taxes on corporation the issue is not how much we’ll pay personally. The issue is what extra taxes on the rich or our employers will do to the economy and our jobs.

It’s easy to say - the XYZ corporation had huge profits, they should be paying more in taxes. But XYZ corporation may employ tens or even hundreds of thousands of people - from higher paid managers, engineers and scientists to lower paid assembly line workers. Sure, the employees may not get a large portion of this money, but they sure are the ones suffering the most when the company’s earnings drop for whatever reason, including taxes. Yes, when times are good you may only get 2% more in bonus or raise while your CEO is likely to get a whole lot more. But when your company’s earnings are bad, you may lose your job.

It’s easy to say that only the businesses with 250K or more in profits will get affected. But these are the businesses that employ people.

22 Retired Syd 11.19.08 at 1:37 pm

“The issue is what extra taxes on the rich or our employers will do to the economy and our jobs.”

If only the kind of tax policy changes we’re talking about really had the power to sink or save the economy and our jobs. Then the U.S. auto industry wouldn’t be asking for a $25 billion bailout, we could just lower their taxes and “poof” all would be better.

But alas, the success of our companies (and therefore our economy) have more to do with supply and demand. You can lower the tax rates as much as you want, but if the companies aren’t selling cars that people want to buy, they are going to fail. Lower taxes won’t save them.

23 Vincent Scordo 11.21.08 at 11:45 am

Is there such a thing as a “socia-capitalist?”

Prior to the middle part of the 20th century large corporations in the US had huge philanthropic arms (their goal was to make some money but it was also to give back to the community). As the US shifted to a more Anglo-Saxon economic model in the 70’s (like we had in place during the early, early 20th century), US corporations have become all about increasing share holder value (see Brenton Woods and the abandonment of the agreement in the early 1970’s for a reason why).

There will always be a back and forth in this country - between pure capitalism and more big government/socialist ideologies.

Vince
http://www.scordo.com/blog/blog - a practical living blog

24 kitty 11.23.08 at 4:00 pm

Retired Syd,
You have a point. No lower taxes cannot immediately save the economy. Nor can they have quick effect on automakers. But lower taxes do help businesses - they decrease their operating costs allowing them more money for our salaries. Higher taxes increase businesses’ costs. Reagan lower taxes did help the economy. Higher taxes in the 30s may not have been only one of the factors that contributed to the Great Depression, but they were a factor.

So yes, IMHO, taxes our employers pay do affect our raises and our jobs. BTW - I work for a rich multinational company that has been doing fine. So far. But I do worry that extra taxes on my employer will hurt my employer’s profits. In the past - and I’ve worked for this company for 25 years - lower profits have always translated in no raises and often translated into lay offs. Higher profits have not always meant great raises, but our raises were indeed better when the profits were higher.

25 StockTradingToGo.com 12.07.08 at 2:18 pm

“But lower taxes do help businesses - they decrease their operating costs allowing them more money for our salaries. Higher taxes increase businesses’ costs.”

That says it all. Tax cuts for businesses are a great thing as it fuels spending and pushes the economy forward. I too am a believer in cutting versus raising taxes (in most situations) for businesses. It also is important for making the United State competitive in the international business world.

26 hotftuna 12.13.08 at 1:23 pm

Bail-outs help nobody in the long run and I fear that the debt they cause will be used as a reason to raise taxes.

Cutting taxes on businesses and individuals is the best form of economic stimulus. That is right out of Economics 101.

27 Currency News 01.14.09 at 4:38 am

You better be hated, but rich!

28 james 03.12.09 at 4:46 pm

Socialists are just theives because they care not about leaving a little room for the “prosperity” of future generations- they just think they have some kind of a huham right ot have kids - that they cannot afford excpet at other people’s expense- so they vote themselves a life. The spcialist deifntion of fairness is “equality”- but it allways ends up that the only sustainable equality is for everyone to be equally poor. No one will work hard to do quality work if they are not getting a special bonus or incentive for their extra effort. You cant legislate effort- excpet in communist camdodia where if you didnt do X amount of work you were killed on spot.

“Equality”… That is fairness to them- the motto of socialism should be “misery loves company.” Wit that said some people have serious disabilties and need help to survuve- I am for helping them- but NO ONE makes you have kids- NO ONE makes you buy an expensive car and go to trips in las vegas when you can barely pay your credit card bills- your house or rent payments- for your kids- and of course your student loans for that liberal arts degree that you never used but eveyone told you you needed.

If we continue on this path the whole worldwill go to an irrevesible hell.

29 Eric 05.21.09 at 1:12 pm

I’d rather make $250k per year and pay 40% taxes than make $50k per year and pay 25% in taxes.

30 Anonymous 10.13.09 at 5:43 am

I have to say, for the most part I agree.
But I see it more like this:

When you’re poor, communism seems like a good option.
When you’re rich, capitalism.
When you’re in the middle, socialism.

The truly poor like communism because capitalism is usually the reason they’re poor in the first place.

The rich like capitalism, because of the points you made.

And the middle don’t particularly like either option, because you don’t like the idea of sharing everything you have, but at the same time you don’t like the idea that if you loose your job, you could become poor.

I mean that’s a very general observation, but for the most part that’s how I see it. I mean you get rich people like celebrities are lean more towards socialism.

Personally, I prefer the idea of socialism, simply because communism (apart from never really working) seriously hinders the advancement of technology, and capitalism, whilst being a good driving point, only allows it to be used by those who can afford it.

Anyway, that’s my two cents. I’m sure not a lot of people see it that way.

31 acai 02.02.10 at 1:30 am

I’d rather be rich not only with respect to my finances but rich with love and kindness toward others as well.

32 Robert 04.12.10 at 6:18 pm

True. The world isn’t black and white.

To whom much is given, much is also required. It is simply called social responsibility.

33 Candee 05.31.10 at 10:03 am

I never thought about the dichotomy between rich and poor as being socialist or capitalist, but now that I think about it, you’re absolutely right. But it doesn’t mean that capitalists don’t have a socialists agenda for everyone but themselves. Hypocritical, yes, but there are many — the Kennedy clan to name a few.

34 bankruptcy Ben 06.20.10 at 5:09 pm

The government exists to protect us from foreign invasion and civil crim (liberty), and taxations should only be leveled to defray the costs that are for the benefits of the society and that can’t be associated with an individual orgainsation or individual.
Most developed nations don’t take issue with eduction. Smart, educated people drive the ecconomy. Nor do most on the issues of defence and police. However on health the issue can be devisive as it’s not always in the best ecconomic interest of the society to pay this expense. More to the point I take issue with with treating people whose conditions are self inflicted (though I understand there is a genetic link so where do you draw the line)
The main issue is that governments by nature of there large size can pervert the market creating and stifling demand.
Most free market advocates would have like the banks and the car companies to FAIL! That’s what bad businesses should do.

35 Jesse 07.31.10 at 10:25 pm

Great Article!

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