A socialist. A populist. A tax-and-spend Democrat. These are just some of the choice terms used by the elite rich of America for the President of the United States. The anger harbored by some of our wealthiest citizens, not to mention their Republican lackeys, for Barack Obama because of his desire to create equality amongst the economic classes was on full display during this election cycle and will probably continue through the fiscal cliff discussions. The fact is that those with money consider him an enemy of their personal estate.
What they are not realizing is that Obama's policies will actually help to protect their future and preserve their fortunes, provided they stop trying to game the system. The biggest flap, of course, has to do with taxes. To distill it down to its most basic truth, the rich feel entitled to not pay the same tax rate as working-class Americans, and are demanding in financial terms what amounts to an homage from our society. Not only is that as ridiculous as it sounds, but is also extremely myopic from the angle of self-preservation. If the rich truly want the protection of the government against the forces of populism and middle class envy, then they should welcome Obama's push for greater equality, for that is the only thing that will ensure the peace and preserve our foundation for successful commerce.
The problem with how the rich view the world is that they believe that prosperity lasts forever. It does not, and when people feel suppressed or disenfranchised, they react. If the wealth and wage inequality in our country, which is already at staggering levels (the top 1% are 288 times richer than the median household and both wealth and income has stagnated for most Americans while rising for the rich), continues to grow, at some point our nation's workers will simply lose the motivation to do their best and to help keep our economic engine running. When the brass ring is no longer accessible and when the promise of upward mobility, which keeps the teeming masses showing up for work even when their jobs are demeaning or unfairly demanding, is no longer credible, then people will have no reason left to accept their fate.
And those ex-workers will not just slink silently away either - the poor, the exploited, the frustrated, will find it more profitable at that point to lie, cheat, and steal instead, and will show up outside the homes and offices of the rich for their piece of the pie. In a perfect world, a rising tide lifts all boats but when smaller boats start capsizing instead (as has been happening of late), then it is time for a different solution.
There was a lot of talk during the elections about those who do not pay taxes, the freeloaders, the moochers, and the welfare whores. What that rhetoric reflects is the widening rift in America between the haves and the have-nots, or more accurately between those who can afford to ignore the problems of others and those who struggle with those problems every day. President Obama is disturbed by this rift, and is trying to do something about it. Raising taxes on the rich, who usually pay a lower rate than everyone else because of the loopholes available to them, is not about redistribution of wealth but about creating a level economic playing field for all Americans, without whose participation the very businesses that generate profit for the owners will stop functioning.
Let's be clear: nobody likes taxes, but they are a necessary tool to fund the infrastructure of our country. The roads, subways, and utilities that keep cities humming and commerce flowing have only been possible because of taxation, and the rich usually employ disproportionately more of those resources than you or me. After all, a convenience store clerk living in New York gets absolutely no benefit from a highway running from Kansas to Missouri, but the Koch Brothers get plenty of benefit from roads everywhere, since the employees at their many companies and subsidiaries use those roads to get to work, since their suppliers use those roads to ship raw materials to them, and since their businesses use them to transport petroleum, chemicals, and fertilizers to customers. If those roads are utilized more heavily by the Koch Brothers than by the convenience store clerk, then why should Charles and David Koch not pay at least the same rate in taxes as the clerk, and why should they receive special breaks and benefits for doing pretty much the same thing that the clerk does, which is to make a living?
Not only is that reasonable but much more importantly, it is fair.
Now that the fiscal cliff discussions are beginning, it is a safe bet that the wealthy will oppose the expiration of the Bush tax cuts ferociously, and try to paint the disagreement between Obama and the Republicans as Class Warfare, but they would do well to remember that they are the ones who are waging a war against the working class by refusing to play by the same rules. They would also do well to remember that what the President is trying to do is not penalize them but to ensure that their workers (and by extension their businesses) are able to flourish for generations to come in a healthy society and a viable economy.
The Bush tax cuts for those making over $250,000 during this time will only deepen our deficit, necessitate even deeper spending cuts to essential public services (which the rich indirectly take great advantage of), and foster even more frustration and resentment in the hearts of low and middle income citizens. That is not a recipe for success but a prelude to disaster, and it should not be allowed to happen.
SANJAY SANGHOEE has worked at leading investment banks and at a multi-billion dollar hedge fund. He has an MBA from Columbia Business School and is the author of a thriller titled "Merger", which Chicago Tribune called "Timely, Gripping, and Original". Please visit www.sanghoee.com for more details.