Boost the economy by killing death tax

Published 7:38 pm Sunday, April 5, 2015

 

A “straw man argument” is when one side misrepresents the other, and then argues against the misrepresentation — the “straw man” — instead of their opponent’s true position.

And that’s what Robert Reich, former Labor Secretary, is engaging in when he claims there’s rising wealth inequality that “is undermining the moral foundations of American capitalism.”

Let’s look at his claims one-by-one.

“Many believe that poor people deserve to be poor because they’re lazy,” he wrote in the Huffington Post recently. “In reality, a large and growing share of the nation’s poor work full time — sometimes sixty or more hours a week — yet still don’t earn enough to lift themselves and their families out of poverty.”

He quotes House Speaker John Boehner out of context, but the truth is we all know there’s a large contingent of working poor. That’s why conservatives support the kind of job training programs and tax provisions, such as the Earned Income Tax Credit that help the working poor improve their situations.



“It’s also commonly believed, especially among Republicans, that the rich deserve their wealth because they work harder than others,” Reich claims. “In reality, a large and growing portion of the super-rich have never broken a sweat. Their wealth has been handed to them.”

That’s demonstrably false, too — not that Republicans deny the existence of inheritance, but that there’s a common belief that wealth is always the result of superior work habits. The Pew Research Center shows that most Americansbelieve that the wealthy got that way through having more advantages, rather than simply working harder.

But Reich uses these two claims to reach a conclusion: “The rise of these two groups — the working poor and non-working rich — is relatively new. Both are challenging the core American assumptions that people are paid what they’re worth, and work is justly rewarded.”

In fact, there’s nothing new about the working poor and the non-working rich. Reich should read a little history. Nor is there a “challenge” to “core American assumptions” that people are paid what they’re worth.

In a free market economy, people aren’t paid what they’re worth. They’re paid according to prevailing markets and to what they’re able to produce. Employment is a voluntary agreement between two parties. A firm hires a worker because that worker can help the firm produce something marketable. A worker accepts a job because the pay is worth his or her time.

There are other reasons people work, of course; they do so for fulfillment and in many cases, because they like it.

Where is Reich going with this? You probably guessed it — he’s against a Republican plan to eliminate inheritance taxes. He calls “dynastic wealth” a danger to democracy.