|Senator John Thune|
C'mon, Senator. Be Reasonable. You Can Do It.
(photo from wikipedia.com)
Like it or not, a capitalist culture is built on risk. The growth of the economy's pool of risk capital should be one of the top priorities of government tax policymakers, and while it's true that cap gains are taxed at lower rates than ordinary income, I believe that's because it's a pragmatic, not a "fairness" issue. If you want entrepeneurs to invest vigorously in the kinds of start-ups that for more than two centuries have driven the growth of this country's economy, a marginal tax break is a reasonable incentive to get them to do so. In effect, society is giving them a break in order to compensate for the losses that are often incurred when their risks go sour. That goes, big time, for the many farmers, ranchers and small business people that dominate the economy of a state like South Dakota. I've seen many of my compadres, both in the country and in town, just barely hanging on for dear financial life, sometimes for years on end, in order to make their investments in their ag operations and businesses pan out. In the process of doing so, they've been the economic engines of their communities, hiring workers, buying goods and services from local merchants, collecting sales taxes, paying local taxes, and supporting their community schools and organizations. Their reward? A decent profit on their land or businesses, either via their estates or through outright sales while they're alive.
Thune's got it right on this one. Beating up on South Dakota's entrepeneurial class in order to give tax breaks to working, middle-class people is no way to show some understanding of what it takes to amass decent capital gains in the first place.
What the Senator apparently doesn't get, though, is that the infamous wage gap we've accrued in this country is just getting wider, with middle income earners basically stagnating while higher income earners maintain their upward arc. Is this fair? I don't know--my attitude is
|We Need To Kick Up Wages In This Country|
Transferring Money From One Class To Another Is Creepy & UnAmerican
(graph from www.economist.com)
Besides the obvious political imperative, Thune's thinking on minimum wages is antiquated and unsupported by research and history. Nice, reasonable guy that John Thune is, I'm confident that if we keep working on him he'll come around.