Saturday, October 15, 2011

Percentages

Percentages are making waves these days.

There's the Occupy Wall Street movement, which is upset that 1% of the country controls so much of our resources. There's the backlash, the 53% who are upset that 47% pay no taxes (federal income taxes, to be precise). There's Herman Cain's 9-9-9 tax plan, which are three different percentages in one!

But there are plenty of truths hidden by these numbers. The top 1.5%, which is about 1.7 million households, make over US$250,000 a year. But not all of them are lazy fat cats sucking on our economic blood. Especially at the lower end of that scale, there are people who do real and relevant work. Similarly, 47% of Americans are not just lazy welfare queens who overextended their credit and are hoping for government to bail them out. Many of them work very hard and many of them wish they had work. The 9% national sales tax also hides a truth. Adding even 1% tax to the poor in this economy is a tremendous hardship. The truth is, once you reach a certain level of comfort, the percentages don't mean nearly as much anymore. If I have to pay thousands more in taxes, I might forego a vacation, perhaps delay buying a house, perhaps buy a cheaper car, none of which seriously affect my way of life. The truth is that I "lose" more than thousands just selling my Apple stock at the "wrong" time.

Are some things so egregious that they disgust me? Absolutely. My capital makes gains literally without me doing anything, and realizing those gains into cash requires a few mouse clicks. Why should those gains be taxed at a lower rate than salary? Yet, should we tax doctors and lawyers and owners of small businesses a lot?

Does it make sense that some people would have less money if they actually found a job? Absolutely, we should fix that nonsense, so we're not paying people to stay home. Are a few having too many children just to collect aid money? Sure, let's fix that.

But the very definition of "poor" is that you don't have enough money for what you need. Taking money from them either in the form of new taxes or decreased benefits means that they have to lose something else that they need. Since unemployment is already at 9%, they're not likely at all to find good jobs, even if you think taxing them would encourage them to seek jobs. So they fall further into poverty, credit, and perhaps even crime.

So look beyond just numbers. There are real people behind them that defy such simple categorization. Saying that it's 99% versus 1% or 53% versus 47% implies that there are only two kinds of people among 300 million Americans, which is just wrong.