What’s the value of a specific school education? I’ve talked about the elite (public) New York City high schools . But, many of the kids who go to those schools are not much different from the kids who went to Brooklyn Poly with me. They (and I) arose from the lower middle class; nowadays, this means they probably may lack a home computer or a home internet connection, both of which are the benefits that accrue when one is from the middle or upper classes. And, that doesn’t even include the ability to go to the college of their choice- where the price of tuition may be just one reach too far.
The social mobility that Americans believe is the norm is just a chimera. The data demonstrate that social mobility in the States is virtually non-existent. As a matter of fact, social mobility is actually more prevalent in Europe, where the social strata have been entrenched for centuries. (Alan Krueger and Miles Corak have effectively proved that the “Great Gatsby Curve” (which demonstrates that lower social mobility correlates with higher income inequality) is the norm; rich parents are much more able to extend privileges upon their children, from extra-curricular activities to donations to universities [enabling their children to more easily enter the institution], and the like). Better high school education doesn’t change those facts.
(Of course, winning a science fair, getting research published when still in high school do change those chances- but the numbers of folks doing so – especially from the lower classes – are virtually zero. I was the aberration in my generation. Thankfully, it gave me the opportunity to pass these sorts of benefits we are discussing here to my children. But, my money went for their education [and a divorce, but that’s a different discussion].)
It’s why some people have proposed a new tax system. Because we have altered the way the other tax system (the estate tax) provided for more income equalization. The data clearly proves that those who have more financial resources when they are young are the ones who accrue the most benefits when they become adults. So, that extra benefit their parents provided helped keep them firmly in the upper income strata. It was due to nothing they actually did for themselves.
The millionaire who inherited wealth (for example, a child of Donald Trump or Bill Koch) should be taxed at a higher income tax rate by their proposal (say 45%) than we assess the millionaire who started his own company and achieved his wealth (taxed at 37%). After all, if we want to reward the “job creators”, isn’t that the proper method?
What do you think of this proposal?
Alma Mater Matters | http://t.co/DM2vDMuSPm via @Adjuvancy
I don’t think I can agree with your opinion that a person who inherits wealth should be taxed at a higher rate than one who earns his money by starting a company. Why should a person be penalized because his/her parents were successful and were able to pass along a portion of their wealth? This is like being charged with a crime you didn’t commit. The parents paid plenty of taxes on their income and I don’t think this double taxation would be fair.
First, this is not my idea… I believe that the inheritance tax needs to be reinstated. But, the idea is that the person who inherits money and makes his (or her money) from that inheritance (and not from creating something like a business) is not as valuable to the overall economy as one who does. And, that means that the tax rates should be higher than that for one who creates jobs. Think of it as a credit to the taxes for those who employ others.
And, the parents did not have “plenty” of taxes on their wealth. The odds are that they inherited it as well.
As an example, the Forbes list of richest people is now mostly those who inherited their wealth- not those who created it.
This kind of thinking is what is hurting the middle class. Parents who start a business, work hard, pay taxes, invest their money and leave the estate to their children. Are you saying that the parent should not have started a business in the first place? The children are innocent…they didn’t ask for this responsibility but they have to deal with people who want to take 45% just because they didn’t “earn” it. Really?
This has NOTHING to do with the middle class. It has everything to do with the top %.
And, if a parent starts a business and grows it- unless it is grown to the point where it is worth $ 10 million (not gross sales), they are not affected either.
And, if the business grew to $ 1 billion- what did the children do to earn that? And, what are they doing now?
The Great Gatsby Curve, I love it. And this just proves I need to move to Italy. Oh I know Italy isn’t even on the curve…so maybe I need to research.
Thanks for that belly laugh, Marie!