# A Question: The rich and the middle class
**URL:** https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431
**Category:** Great Debates
**Created:** [February 24, 2011, 8:12am UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431 "2011-02-24T08:12:02Z")
**Posts on this page:** 20
**Page:** 2
### Author:  [@Voyager](https://boards.straightdope.com/u/Voyager)
#### Post date: [February 24, 2011, 5:36pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/21 "2011-02-24T17:36:35Z")
> [@MandaJo](#):
>
> Here in TX, at least, it has to do with limits on deficit spending by the state. Constitutionally, we have to have a balanced budget: when the tax revenues aren’t there (and they aren’t there in a really big way right now), taxes have to go up or spending has to go down. No one is willing to raise taxes because the last election made them think that that will be death in the primaries. Education is the largest single issue in the budget, so any meaningful cuts will hit education.
>
> On the federal level, deficit spending is the norm. The whole way of thinking about these issues is different. The theory, at least, is that by keeping taxes low on the top percents of earners, the economy as a whole will grow/recover in a more robust fashion, helping everyone.
However the data from economics is clear - tax cuts for the rich (and keeping their taxes low) is the worst way of improving the economy. (Other than breaking windows, I assume.) I understand the politics - in California the Republican minority claim the deficit is a big problem, but they not only oppose raising taxes but oppose a referendum on maintaining the emergency tax increases we have now. I can only assume this is because the prospect of voters approving taxes would make their little minds explode. My question was more one of basic economics - why does a tax increase on the rich hurt the economy, but an effective tax increase on the middle class not?
> [@](#):
>
> If the federal government had to balance their budget the way many states do, the conversations last December would have been very, very different. I’m not saying that any of this makes a whole lot of sense, but the “they” that wanted to extend the Bush tax cuts is not the same “they” that are slashing state budgets everywhere right now.
If the Federal government had to balance its budget, maybe we wouldn’t have gone into Iraq, but mostly the economy would have tail-spinned into depression.
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### Author:  [@Voyager](https://boards.straightdope.com/u/Voyager)
#### Post date: [February 24, 2011, 5:40pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/22 "2011-02-24T17:40:59Z")
> [@Sam\_Stone](#):
>
> Portraying them as the weak and disadvantaged is simply ridiculous. In California, they virtually run the government, and they have inordinate amounts of power in every state. They are also much wealthier than the average worker in the private sector.
Gee, if they ran the government I bet we’d have at least a proposition coming to maintain taxes. I bet school funding wouldn’t have fallen so far relative to national norms since Prop 13. You actually know very little about California politics.
BTW, the reason teachers make more than the average worker is that they are significantly better educated than the average worker. I suppose cutting their pay to be commensurate with a sales clerk at Macy’s would help the budget - is that what you want?
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### Author:  [@MandaJo](https://boards.straightdope.com/u/MandaJo)
#### Post date: [February 24, 2011, 5:56pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/23 "2011-02-24T17:56:21Z")
> [@Voyager](#):
>
> However the data from economics is clear - tax cuts for the rich (and keeping their taxes low) is the worst way of improving the economy. (Other than breaking windows, I assume.) I understand the politics - in California the Republican minority claim the deficit is a big problem, but they not only oppose raising taxes but oppose a referendum on maintaining the emergency tax increases we have now. I can only assume this is because the prospect of voters approving taxes would make their little minds explode. My question was more one of basic economics - why does a tax increase on the rich hurt the economy, but an effective tax increase on the middle class not?
>
> If the Federal government had to balance its budget, maybe we wouldn’t have gone into Iraq, but mostly the economy would have tail-spinned into depression.
I know these things. My point is just that you can’t be mad at a monolithic “them” for being hypocritical in this case: it’s different groups working within different parameters (though I am sure some state officials that were public supporters of extending the Bush tax cuts are involved in the current cuts).
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### Author:  [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)
#### Post date: [February 24, 2011, 6:04pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/24 "2011-02-24T18:04:08Z")
> [@Smitty](#):
>
> Because these “middle class” people that you are talking about are being paid with the public’s money. The “rich” aren’t. Why is it so hard to understand that private wealth does not belong to the government?
>
> Bullshit. The American Federation of Teachers has contributed nearly 26 million dollars to the Democrats since 1990. The National Education Association has contributed over 27 million, and the American Fed. of State, County, & Municipal Employees has given them over 40 million.
>
> Cite. [http://www.aier.org/research/briefs/1550-obama-thanks-his-friends-government-spending-and-union-support](http://www.aier.org/research/briefs/1550-obama-thanks-his-friends-government-spending-and-union-support)
>
> Every dime of that is, at the end of the day, taxpayer money.
Unions are one of the few orgs pushing left wing economic views with any clout, which is why they are being attacked on the state level right now. So yeah I’ll grant you that, unions (which include teachers) are pushing left wing economics.
But it doesn’t change the fact that the working class left does not have the kind of investments in think tanks and media outlets that the right does. Groups like the Democracy Alliance are trying to change it, but they realize it will take a while.
$27 million over 20 years isn’t a lot when election cycles cost $1-3 billion each 2 years.
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### Author:  [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)
#### Post date: [February 24, 2011, 6:05pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/25 "2011-02-24T18:05:11Z")
> [@Voyager](#):
>
> It could also mean that teachers are too ethical to hurt the education of their students when they are screwed by the politicians. Just like when the money for classroom supplies vanished they paid for it out of their own pockets.
You mean like those ethical teachers who shut down Wisconsin schools for a week, while providing phony sick letters from doctors sympathetic to their cause so they could still collect their pay for the time they skipped?
Those ethical teachers?
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### Author:  [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)
#### Post date: [February 24, 2011, 6:12pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/26 "2011-02-24T18:12:08Z")
> [@Voyager](#):
>
> Gee, if they ran the government I bet we’d have at least a proposition coming to maintain taxes. I bet school funding wouldn’t have fallen so far relative to national norms since Prop 13. You actually know very little about California politics.
> BTW, the reason teachers make more than the average worker is that they are significantly better educated than the average worker. I suppose cutting their pay to be commensurate with a sales clerk at Macy’s would help the budget - is that what you want?
When Arnie tried to cut the budget in California, the main roadblock he ran into was the public unions and their sycophants in the legislature. They spent millions on advertising, they scheduled rotating protests and Schwarzenegger got clobbered.
You progressives should be the ones fighting the public unions. Every dollar that goes into some double-dipping bus driver’s generous pension plan is a dollar that could have been spent helping the poor. Every dollar wasted in government is a dollar that’s used by your opponent to show how wasteful government is and to build opposition to government. Do you really want your progressive legacy to be that of featherbedded cushy union jobs, rather than, you know, helping the poor and disadvantaged? Is that what you’re all about?
On the other hand, I understand why Democrats are willing to go to the mat for the public unions - they are basically a mechanism for transferring huge amounts of money from taxpayers straight to the Democratic party. Taxpayers pay for the unions, which then take a percentage of the pay and donate it to the Democrats, which then fight tooth and nail to get more pay and benefits to the public unions. It’s a nice racket for both of them, but it leaves taxpayers holding the bag.
Taxpayers are starting to wise up.
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### Author:  [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)
#### Post date: [February 24, 2011, 6:22pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/27 "2011-02-24T18:22:10Z")
> [@septimus](#):
>
> So we shouldn’t tax the rich, if that won’t solve our problems? Two flaws here.
> (1) Taxing plumbers raises even less money than taxing the rich, so by your implied argument we shouldn’t tax plumbers! (Better yet, let’s not tax people named **septimus** 🆒 )
The point is that you can’t raise enough money from _anyone_ to have enough to materially raise up the middle class. There’s too many middle class people compared to the rich. If taxing the rich could make everyone wealthy, you might want to explain why America’s _median_ income is higher than almost any other country, despite there being plenty of countries that tax their rich a lot more.
> [@](#):
>
> (2) The rich _do_ have quite a bit of wealth and income. The top 1.2 million households averaged $1.3 million income in 2007; getting even an extra 7% of that would net over $100 billion – hardly chump change.
In terms of the U.S. government, yes it is. The federal government has a budget deficit of 1.6 trillion dollars. Taking 7% more of the income from the top 1.2 million households wouldn’t even cover 5% of the _deficit_, let alone be the wellspring of wealth that could lift up the middle class. And let’s not forget that the state governments also take their share of the wealth from the rich.
It gets worse than that - taking that 7% of income from the rich will have an affect on economic growth, which will reduce the receipts you’d get by some extra amount. You start to run into diminishing returns as the marginal rate goes up. Also, taking 7% more of the income of the rich would require very high marginal rates, because they’re already being taxed a fair chunk of that income. So their taxable income is maybe 20% smaller. If you want 7% of that, you’d need a marginal rate increase of 10 points or so. Then you run into increased tax avoidance activity, which means you’d need even higher rates to compensate for that.
This is how politicians wind up boxing themselves into a corner that forces them to drive marginal rates on the rich up to 70, 80, 90%. Then in the end they can’t figure out why they’re still not getting all that revenue.
> [@](#):
>
> Is income inequality good or bad? That debate seems lost to the rationalist side in today’s America. I’ll just quote from [an article demonstrating that the inequality is worse than most think](http://sociology.ucsc.edu/whorulesamerica/power/wealth.html):
Just asking if income inequality is good or bad is asking only half the question. The REAL question is, “Is achieving income equality a good that outweighs the negative effects of the policies required to achieve it?” Even if income inequality is bad, the effort to reduce or eliminate it could result in outcomes far worse. You know, like destroying civil liberty or bankrupting the country.
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### Author:  [@Shodan](https://boards.straightdope.com/u/Shodan)
#### Post date: [February 24, 2011, 6:23pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/28 "2011-02-24T18:23:43Z")
> [@Sam\_Stone](#):
>
> > [@Voyager](#):
> >
> > It could also mean that teachers are too ethical to hurt the education of their students when they are screwed by the politicians. Just like when the money for classroom supplies vanished they paid for it out of their own pockets.
>
> You mean like those ethical teachers who shut down Wisconsin schools for a week, while providing phony sick letters from doctors sympathetic to their cause so they could still collect their pay for the time they skipped?
>
> Those ethical teachers?
This is pretty much the best comeback I have read all week, but it slightly misses the point.
A teacher who will do the same job for 10% less and calls it being “ethical” is no different from the teacher who accepts the 10% pay cut because he can’t find another job that pays more. Both are overpaid by 10%.
The market is neither moral nor immoral; it is **a** moral. You are worth whatever you can get someone else to pay you without coercion, whether you are Mother Teresa or some timer-serving hack screaming bloody murder because she can “only” get an 8% raise.
Regards,
Shodan
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### Author:  [@yorick73](https://boards.straightdope.com/u/yorick73)
#### Post date: [February 24, 2011, 6:28pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/29 "2011-02-24T18:28:49Z")
> [@Voyager](#):
>
> My question was more one of basic economics - why does a tax increase on the rich hurt the economy, but an effective tax increase on the middle class not?
The question has been answered but, I assume, you didn’t like the answer. You are comparing apples and oranges. Teacher salaries and benefits are included in the state budget outlays. This can be reduced. Taxing the rich at the state level, as **Sam Stone** pointed out, can drive away business and rich individuals. What is the end result? Less rich to tax at all and less sales revenue coming in from all those rich people making purchases. Ask New York and Maryland how their “soak the rich” schemes worked out for them.
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### Author:  [@villa](https://boards.straightdope.com/u/villa)
#### Post date: [February 24, 2011, 6:31pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/30 "2011-02-24T18:31:05Z")
> [@John\_Mace](#):
>
> But the real answer lies in the market. If we cut teacher salaries by 10%, will that significantly reduce the quality of education? If not, then teachers are paid too much.
Are you talking short term or long term effects here? Also, how do you define “the quality of education”?
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### Author:  [@MandaJo](https://boards.straightdope.com/u/MandaJo)
#### Post date: [February 24, 2011, 6:33pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/31 "2011-02-24T18:33:07Z")
> [@Shodan](#):
>
> This is pretty much the best comeback I have read all week, but it slightly misses the point.
>
> A teacher who will do the same job for 10% less and calls it being “ethical” is no different from the teacher who accepts the 10% pay cut because he can’t find another job that pays more. Both are overpaid by 10%.
>
> The market is neither moral nor immoral; it is **a** moral. You are worth whatever you can get someone else to pay you without coercion, whether you are Mother Teresa or some timer-serving hack screaming bloody murder because she can “only” get an 8% raise.
>
> Regards,
> Shodan
Remember that supply is not just “willing”, it’s also “able”–the flip side to this is that if people are unwilling or unable to provide the same level of education when working under reduced circumstances (because of increased student loads, the need to spend time earning supplemental income, or whatever), no fair blaming “time-serving hack[s]” for providing less of a service, no fair calling teachers lazy or unethical if they don’t produce at the level we, as a society, would like. If the market is totally amoral, that cuts both ways.
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### Author:  [@villa](https://boards.straightdope.com/u/villa)
#### Post date: [February 24, 2011, 6:35pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/32 "2011-02-24T18:35:03Z")
> [@MandaJo](#):
>
> Remember that supply is not just “willing”, it’s also “able”–the flip side to this is that if people are unwilling or unable to provide the same level of education when working under reduced circumstances (because of increased student loads, the need to spend time earning supplemental income, or whatever), no fair blaming “time-serving hack[s]” for providing less of a service, no fair calling teachers lazy or unethical if they don’t produce at the level we, as a society, would like. If the market is totally amoral, that cuts both ways.
Please don’t expect consistency from defenders of the free market run rampant. For them, coercion in particular only runs one way.
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### Author:  [@Steve\_MB](https://boards.straightdope.com/u/Steve_MB)
#### Post date: [February 24, 2011, 6:37pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/33 "2011-02-24T18:37:15Z")
> [@Sam\_Stone](#):
>
> Here’s another good set of graphs: [Two Americas](http://mjperry.blogspot.com/2010/02/two-americas-public-sector-vs-private.html). They show that the unemployment rate for public sector workers is only 3%.
If you can’t see the obvious idiocy of this assertion (hint: What trait defines someone as a “public sector worker” as opposed to a “private sector worker”?), you simply are not qualified to have any opinion on the subject worthy of my attention.
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### Author:  [@Shodan](https://boards.straightdope.com/u/Shodan)
#### Post date: [February 24, 2011, 6:56pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/34 "2011-02-24T18:56:10Z")
> [@villa](#):
>
> Are you talking short term or long term effects here? Also, how do you define “the quality of education”?
I’m not **John Mace** , but I would say
[ul][li]Both, and[/li][li]Student achievement. More specifically, the amount of improvement on the various measures of achievement from the beginning of the school year to the end.[/ul][/li]
> [@Manda Jo](#):
>
> Remember that supply is not just “willing”, it’s also “able”–the flip side to this is that if people are unwilling or unable to provide the same level of education when working under reduced circumstances (because of increased student loads, the need to spend time earning supplemental income, or whatever), no fair blaming “time-serving hack[s]” for providing less of a service, no fair calling teachers lazy or unethical if they don’t produce at the level we, as a society, would like. If the market is totally amoral, that cuts both ways.
Sure. However, if one group says they can’t produce at the same level unless they get a larger raise than 8%, then it is legitimate to see if there might not be other groups that can, and are willing to try. Hire scabs, in other words.
Regards,
Shodan
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### Author:  [@Rumor\_Watkins](https://boards.straightdope.com/u/Rumor_Watkins)
#### Post date: [February 24, 2011, 6:59pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/35 "2011-02-24T18:59:24Z")
well I think the answer is that (to some) a dollar has different value depending on who is holding it.
the middle class person spends that money on pre-existing economic things. they are shuffling the money around and not “creating” with it.
but when the upper class person invests that money, they’re creating new opportunities.
or some bullshit.
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### Author:  [@villa](https://boards.straightdope.com/u/villa)
#### Post date: [February 24, 2011, 7:05pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/36 "2011-02-24T19:05:21Z")
[quote=“Shodan, post:34, topic:572431”]
I’m not **John Mace** , but I would say
[list][li]Both[/li][/QUOTE]
Both would be idiotic. That there is no effect of a 10% cut in teachers salary in the short term, where teachers are to a large extent locked into their job, has no bearing whatsoever on whether teachers are overpaid or not.
Jesus, if people are going to defend the free market, it would help if they understood even the fantasy Disney version of it that gets preached as an accurate representation of the real world.
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### Author:  [@MandaJo](https://boards.straightdope.com/u/MandaJo)
#### Post date: [February 24, 2011, 7:08pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/37 "2011-02-24T19:08:33Z")
> [@Shodan](#):
>
> Sure. However, if one group says they can’t produce at the same level unless they get a larger raise than 8%, then it is legitimate to see if there might not be other groups that can, and are willing to try. Hire scabs, in other words.
Many public schools already have trouble filling their ranks, and that the quality of teachers we are getting is already lower than what many people consider acceptable, which suggests we are already paying below market equilibrium. I think it’s unlikely that enough scabs can be found who are both willing and _able_ to teach public school at a significantly lower rate.
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### Author:  [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)
#### Post date: [February 24, 2011, 7:12pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/38 "2011-02-24T19:12:36Z")
Could you point to a state that is facing a real teacher shortage that isn’t because of a budget shortfall but because of a lack of applicants?
> [@MandaJo](#):
>
> Remember that supply is not just “willing”, it’s also “able”–the flip side to this is that if people are unwilling or unable to provide the same level of education when working under reduced circumstances (because of increased student loads, the need to spend time earning supplemental income, or whatever), no fair blaming “time-serving hack[s]” for providing less of a service, no fair calling teachers lazy or unethical if they don’t produce at the level we, as a society, would like. If the market is totally amoral, that cuts both ways.
This strikes me as a self-justifying load of crap. Workers in the private sector are facing wage cuts much greater than anything the public sector has faced, and it hasn’t caused a collapse in productivity. And most of the cuts the teachers are being asked to take are really cuts to their long-term benefits or being asked to contribute a small amount to their health care or retirement - like everyone else pretty much has to do.
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### Author:  [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)
#### Post date: [February 24, 2011, 7:15pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/39 "2011-02-24T19:15:01Z")
\
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### Author:  [@Shodan](https://boards.straightdope.com/u/Shodan)
#### Post date: [February 24, 2011, 7:15pm UTC](https://boards.straightdope.com/t/a-question-the-rich-and-the-middle-class/572431/40 "2011-02-24T19:15:16Z")
> [@villa](#):
>
> Both would be idiotic.
No, it’s what’s called “common sense”. You consider both the short- and long-term effects of what you do. At least you do if you are a conservative who is concerned about deficits and entitlements and looming costs. If you simply say “teachers need unlimited raises no matter what” I guess you are a liberal.
> [@](#):
>
> That there is no effect of a 10% cut in teachers salary in the short term, where teachers are to a large extent locked into their job, has no bearing whatsoever on whether teachers are overpaid or not.
I’m having trouble parsing this sentence. If I understand it, it’s wrong. I said that both the long- and short-term effects of a pay cut (pretending for the moment that teachers are facing a pay cut, which they are not) need to be considered.
If you are saying that teachers are in some way prevented from leaving their jobs and working in the private sector, I can tell you from personal experience (I was a student teacher in the Wisconsin public school system many years ago) that this is not the case. My wife was a teacher for some years, left to work in the private sector, and is now teaching again.
If you are claiming that short-term effects cannot be considered in deciding if teachers are over-paid, that’s wrong too. Both long- and short-term effects need to be considered.
By the way, both short- and long-term effects need to be considered.
Regards,
Shodan
PS - Both short- and long-term effects need to be considered.
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