Who is at fault for wealth disparity gap in America?Published 10:11am Tuesday, May 13, 2014
My Point of View by Peggy Bennett
Income disparity — the gap between the lowest wage earners and the top wage earners — is a very real issue in America right now. This concerns me greatly, as I know it does many people.
The income disparity gap has been widening for several decades now, regardless of which political party has been in power. Statistics show that income disparity has widened at an even more rapid pace during the past six years. This is critical.
Who is at fault for this widening income gap? In most cases, Republicans will blame Democrats, and Democrats will blame Republicans. Personally, I think it’s time to stop the blame game and start figuring out how to solve the problem and get more and better paying jobs available for people.
If we want to examine causes, the forces contributing to the income gap are both complicated and multiple in number. Outsourcing many of our meat=and-potatoes type jobs to people in other countries overseas is surely one factor. And probably at least as important is the rapid development of computer-related jobs. These jobs require ability, initiative and training. Even auto mechanics now need some acquaintance with technology to diagnose malfunctions in today’s computer-programmed engines.
In addition, as everyone knows, countless numbers of Americans in all lines of work use computers at their workstations. Unfortunately, those who lack either ability, initiative or training are generally getting further behind. The main point to be made here is that, whatever the hidden forces at work cause income disparity, it is pretty much impossible to ascribe blame to any particular person or political party.
The more important question is, how can we fix this problem? For some, the all-encompassing answer for public policy issues is always the same: more government control, especially by the federal government when possible. Along with more government control comes the inevitable — the government needs to take more of our money.
One way to raise taxes that Democrat leaders favor is a sharp increase in estate taxes and inheritance taxes. However, this is not the panacea that it seems. First of all, inheritance taxes today make up only 1 percent of federal revenues — not enough to make a difference. Secondly, all inheritance wealth does not come in identical form. When most of us think of inheritance tax, we picture a big wad of money sitting in someone’s bank account. However, not everyone who inherits $2 million of assets inherits $2 million in cash money.
Consider this scenario: A married couple owns a nice family restaurant and their son helps manage the restaurant. The parents tragically die in an automobile accident. The son does not inherit $2 million; he inherits the restaurant. If some combination of estate taxes or capital gains or other taxes hit him up for a large part of the estate’s value, the son may be forced to sell the family restaurant to pay his tax liabilities.
Let’s bring this example a little closer to home. Someone in southern Minnesota inherits his or her family farm — not $2 million in cash. That son or daughter may be forced to sell the family farm to pay the taxes.
Both of these examples are common and are not the “rich” or “famous” people we think of when we consider pumping up the estate and inheritance taxes. Excessive taxes like these hurt the hard-working people and families in our own communities.
I am always very skeptical when the liberal progressives among us assure us that when government lays claim to more and more of our money, that the government will spend the money well and wisely. I hate to say it, but the track record for wise spending in government is just not there. As a matter of fact, government has the opposite track record when it comes to spending our hard-earned money.
Today, Minnesota is confronted with the same choices that all the other states also face: either more government and higher taxes, or less government and lower taxes. Our current Democratic controlled Minnesota legislature has recently raised taxes by about $2.1 billion and has cut taxes about $440 million. That sounds like a net increase of about $1.6 billion in taxes for Minnesota.
Consider that most of the states prospering now and over the past few years have Republican-controlled governors or state legislatures. On the converse side, the states that are most seriously in debt and in budget trouble are, for the most part, governed by Democratic governors or state legislatures.
In closing, I want to say that the Republican Party has not always done things perfectly, nor do Republicans have all the answers. However, I do believe that the true Republican philosophy of more local control and a smaller more-efficient government will put our finances and power back into the hands of each of us — Democrats, Republicans, independents, Libertarians and more — and together, we do have the answers.
So, you choose this November — a bloated, sluggish, inefficient government that gives us one-size-fits-all answers for everything (and many times those answers do not fit our southern Minnesota needs.) Or do we want to return more power to our local counties and communities where we can all get our heads together and find the right answers for us?
Albert Lea resident Peggy Bennett is a Republican candidate for the House District 27A seat.