During the presidential campaign – and continuing thereon after – President Obama lumped me and all $250,000-plus households into the same category. A category he called “the wealthy.” (Without, by the way, ever describing the specific logic or genesis of that magical threshold, which sometimes dropped to $200,000.)
Raising taxes on each and every one of those households without distinction was an oft-repeated plank of his campaign.
This is financial profiling. And in its way it’s philosophically as intellectually and morally indefensible as racial profiling. Now how your emails; I’m not equating paying more taxes with the ugliness and brutality of police discrimination. Nor am I taking a position on Gates vs. Cambridge (although the incident did make me think more expansively about the subject.)
Nor am I making a supply-side argument, or saying that we shouldn’t increase progressivity on the high-end of the income curve.
But I am saying that the curve has points along its arc, and that both racial profiling and financial profiling are categorical, anti-individualized, sloppy and harmful. We have a president famous for nuanced thinking, for making clarifying distinctions, but his stereotyping of all $250,000 families is exactly the kind of argument-by-broad-brushing that he so articulately opposes in other realms.
Day in and day out, President Obama hammered his meme of taxing “wealthy” households without recognizing what a heterogeneous group that is, and how geography factors into the calculus. Yes, I’ve heard the argument that those who earn over $250,000 are a small group – as if small numbers is a legitimate rationale for profiling. (Those who earn over $250,000 represent roughly 3% of the population and around 48% of all personal federal income taxes.)
Two long-term public school teachers in New York City can earn $250,000 a year. Should they be taxed at the same rate as, well, name-your-gazillionaire? That’s an argument I welcome and that we need to have: one side would maintain that the tax code shouldn’t make distinctions within a tiny and privileged slice of the population: the other would insist that there’s an order of magnitude difference between the teacher and super-rich.
We should also argue about what’s equitable for small business owners, whose Subchapter “S” corporations require that whatever shows up as profit at the end of the year. So what is in effect working capital that gets plunked back into the business must be reported as income.
And let’s have an argument about whether all categories of income should be taxed the same. The tax code already puts a value judgment on “quick money” by taxing short capital gains at a higher rate than long-term ones. The former is seen to benefit the individual more, and the social good, less. The latter, by contrast, is seen as benefiting society to a greater extent, because long-term investment, and the growth and stability it encourages, serves the greater good more so than a fast flip does.
What’s the extension of that capital gains social calculus to personal income? Should a bond trader who makes a million dollars a year by moving money around digitally be taxed at a higher rate than an entrepreneur who makes $250,000 by hiring ex-cons to build furniture in the Bronx? Both inhabit the same tiny three percent.
The government needs more money to fund its extraordinary deficit, and to extend health care. But we can’t have an intelligent conversation about where that money must come from if the president defaults to financial profiling and clarity-obscuring generalizations. We make narrow and sharp decisions about how we spend our tax money – good and bad – but blunt and fuzzy decisions about how we collect it.
President Obama has led the nation in some difficult but therapeutic conversations that have made lapidary distinctions about race, about torture, about national security. Next-up should be the one about money.