The thought-provoking wealth distribution video I posted a few days ago stirred up more comments than anything else we’ve ever posted. Of the over 700 comments on facebook and this blog, there were many constructive suggestions, lots of questions, and — as usual — plenty of anti-government sentiment. Thanks for all of your comments.
The most common question: What can we do? There’s the obvious: Avoid needless wars. Cut back on military spending. Open up our economy for investment and growth. Go back to a more progressive tax code, as we had under Reagan and Clinton. And defend the inheritance tax (without which we encourage a future generation of idle-rich kids).
And then there’s something nobody seems willing to seriously consider: Why not institute a small but inescapable wealth tax? Imagine if just having a “net worth” here in the USA cost 1 percent of that net worth every year? If you sat on a pile of wealth (say $10 million) for 20 years, it would cost you 20 percent of that wealth ($2 million) to keep it in a country where it’s not scary to be rich. (Anywhere else on the planet, someone that rich would spend at least that much just on security.) I’m sorry, but I wouldn’t pity a person once worth $10 million now only worth “only” $8 million if it makes our country a stronger and healthier one.
Many asked why, if I care so much, don’t I just give more taxes? That’s kind of silly. We need to respond to this challenge as a society. A few caring, patriotic, wealthy people giving what all wealthy people should give would accomplish nothing. If being wealthy in the USA came with a higher tax obligation (as it did for most of the 20th century), we could — assuming smart use of that money entrusted to the government — create a better society. Remember, not long ago our tax dollars took us to the moon and built the Interstate Highway System.
What can we do? In short, I’d say support a return to a more progressive tax code. Making it more expensive to be rich would not deter hard-driven capitalists (like me) from investing and working hard to get rich — and, assuming they’re at all patriotic, it certainly wouldn’t drive them out of the country. I believe anyone who says otherwise is either mistaken or dishonest.
For all those who say, “Why don’t you just stick to travel writing?”, “I’ve been a loyal customer for years, but with this post, you have lost me,” and “Stick to your day job, comrade Steves,” I say life is political. We have to live with the political decisions we make as a society. And so do people struggling in our country, people struggling south of our border, and people who will be struggling generations from now with the mess we leave them. Politics is like stewardship. And I believe in thoughtful stewardship.
If you missed this wonderfully intriguing little video clip, check it out below. Meanwhile, next week, I kick off my spring travels overseas — reporting from Egypt, Israel, and the Palestinian Territories.
If you can’t see the video below, watch it on YouTube.
I support you Rick! We need to work together to improve this company. I work near a major university and talk to people from different countries. We are a great country, but how we handle health care and how we deal with taxes needs improvement compared to other industrialized nations.
Well said, Rick. I don’t know if we’ll ever live to see such changes but I certainly hope so. Greed is destroying our civilization.
Comrade Rick: It is a great society we live in where we can choose to disagree and remain friends (even though I don’t know you, I wish I did). I am sure we could have an interesting and frank discussion over a glass or two of fine italian red wine. However, I think you are misunderstanding the problem – it’s simply we can not tax the rich enough to fix our government spending problem. The vast sums of money are in the multitudes of the working class. There are simply many, many more of them than there are the rich. The problem with the current government is they are not being honest. If you want national healthcare tell the people what it will cost them; don’t try to hide it. Remember, the reason the budget was balanced under Clinton was the middle class paid more in tax than they do now.
OK – back to travel!
T.J.
An excellent response to bigoted answers to an excellent original article. Congratulations for not dipping into the same hatred vial that so many in this country are now resorting to. I would hate to think that a nice guy such as Rick Steves might get more than half negative responses to a well thought out discussion on a vital national problem, so let me quickly add my thanks, and the thanks of the other 4 in our daily coffee group, for taking the stand that more should at least think about. No wonder I have always totally enjoyed your travel videos — you’re a thinking man in a country growing less thinking every year.
TJ, if you think the middle class have overall a larger sum of money than the wealthy, then you did not view (or did not understand) the video. What part of that graph that skyrockets off the page do you not understand? The bottom 80% of Americans only have 7% of the wealth? You are just plain wrong on this. You are correct, however, that JUST increasing taxes on the wealthy will not solve the problem. We also have to cut spending. But we shouldn’t be cutting health care and educational programs for kids – we should be cutting military spending. Congress gives the military even more money than they ask for, for projects they don’t want. Getting out of Iraq and Afghanistan is a start.
quick correction – I meant to have a period, not a question mark at the end of “The bottom 80% of Americans only have 7% of the wealth.” That’s a fact presented in the video.
I would like to live in a state where you are my senator.
“Anywhere else on the planet, someone that rich would spend at least that much just on security.”
Really? Anywhere else? I do wonder if, despite publishing all the guide-books, Mr Steves has ever actually visited Western Europe. He does appear to have watched “Taken” quite a lot, though.
I saw an interesting article this morning. I don’t think I can post links here, so just search for “‘Trickle-down consumption’: How rising inequality can leave everyone worse off”. It’s at the Washington Post. Basically, it would be better for the wealthy business owners if the people below them on the economic ladder had more money to spend.
I am with you. Glad for your success in the travel business. You made travel easier and much more fun the the large group tours with stops to sell something to the tourists and lots of tips required. Also enjoy plenty of free time when on atour. Thank You Don
You could tax EVERYONE in the country at 100% and it wouldn’t make a dent in the deficit! Too many in our society are now sucking on the teat of government, that should/could otherwise be taking care of themselves. Yes, there are those who truly need help, and yes, we should do our best to provide for those who are truly in need. But unfortunately we’ve teetered over the edge of 50% of our citizens/voters, who now get SOMETHING from the government, and will therefore continue to VOTE to maintain the freebies they’re receiving! Our Founders believed strongly in the rights of individuals over the collective, but that concept has now completely been turned on its head, and as Europe is well ahead of us in this regard, we are seeing the financial and societal consequences of adopting that model. As Margaret Thatcher so rightfully said, “Sooner or later you run out of other peoples money”!
It is frequently said that citizens don’t condemn the super rich or even the simply affluent because our fellow citizens aspire to that themselves. They continue to be quiescent about insider trading, high speed trading, carrying charges at lower tax levels, bailing out banks, corporate welfare and military overrun programs like the F-35 and the Osprey not to mention aircraft carriers which are sitting ducks and gifts to demagogues like Karzai and in the past Mushareff. We are as a people divided not only as the haves and have-nots but as the know it alls and the know nothings. Much of what we don’t know is because we are so busy working or entertaining ourselves that we don’t study and analyze as critical thinkers. And many who are critical thinkers are afraid to speak out for fear of jeopardizing their own jobs. It’s not too far fetched to believe that much of what government spends is to mollify the masses because if they don’t the end game is clear.
Rick, I couldn’t agree with you more! The vocal minority may disagree, but I’m sure many, many middle and lower class Americans who are actually living this reality would strongly agree with you. There is something about the power of money and its grip on people, especially the wealthy. I know a little of which I speak, as I have family members who would be classified in the top 5% of earners. If only I ruled the world… :)
Of course we need cut backs. But the question is how much and where? Try to figure out where the waste really is. This is always protected by special interests and their groups. The larger our country and populations grows the more difficult ist will be to figure this out. It is rediculous to blame one party on this mess. Gas in the spring of 2008 under George Bush was higher than it is right now. This due to world comsumption and not Democrats or Repub. Hey we sent all our work to China and India and made their economy flourish, what would you expect to have happened. And home sales fell because a three bedroom two bath house was and is never been worth a million dollors. Again what would you expect. I don’t believe that we should just throw good money over bad, but it is more complicated than just slashing everything to the bone. These may have consequences you don’t want.
It’s
Spending in the form of:
Tax breaks
Entitlements
Wars
Co-opted politicians
Leverage (debt)
Printing trillions in new dollars
Propping up foreign governments
Corruption
It’s Politics in the form of
The Golden Rule (those who have the gold rule).
It’s ignorance in the form of U.S. citizens who don’t know or understand or what’s going on or how to fight back.
It’s the haves who don’t want to give it up against the have nots who want it – and I know plenty of the former who don’t want to give it up because they feel the have nots have not earned it. On the other hand, there are plenty of haves who: inherited; had high falutin’ educations; were lucky; were in the right place at the right time; cheating on income taxes. And plenty of takers among the have-nots: milking SSI; Medicaid; food stamps; Medicare; mortgage interest rate deductions; double/triple dipping govt. contractors; using the ER when they can afford a doctor or nurse. It’s trite but we really are our own worst enemies.
The military has already taken huge cuts, and more is on the way. Most military spending is discretionary, which means Congress has to re-authorize the budget every year.
Although I do beleive that taxes should be higher for everyone, even that won’t help in the long run if the US doesn’t institute a major overhaul of it’s most expensive benefit programs. Look at the Congressional Budget Office’s graphs that show the projected GDP to debt ratio if nothing changes. How sustainable do you think it is if the government spends more than 100% of GDP? It’s not simply a matter of who pays more taxes or which program gets more funding. The country is going to go bankrupt unless the major drivers of long term debt accumulation (social security and medicare) get a significant overhaul. If you disagree, then look for yourself at the CBO’s own figures.
Thomas, I totally agree with your comment. For the life of me, I do not understand how anyone would want the US to model itself on such an unsustainable model as Europe. It is simply infantile to think raising taxes on the “rich” will solve problems. Even France has to backtrack on it’s 75% tax rate on the wealthy. It never brings in more money. All it does it create wealth flight.
Rick, very well put. We provide both financial security and personal safety to the wealthy members of our nation. That security and safety comes at a premium and so it must come with a premium. And given this security and safety, a more progressive tax code and higher tax obligation for the wealthier citizens of our nation will not result in their mass exodus. Individuals like Warren Buffett understand both this and the fact that a stronger, more equal society is better for all of us, including the wealthy. Keep up the good work locally, nationally, and internationally.
I am not as rich as Warren Buffett, but am wealthy enough and qualify to reply. For my response, however, I must use an analogy. Every organ in our body is well protected by a tremendous infrastructure (skin, muscles, bones, tissues, and the defense army-the white blood cells). For the body to keep healthy, on the whole, it must maintain its “homeostasis,” a balanced state. We must provide to it proper nourishment and fluids, but not to the extreme. If something shifts any one of the body’s mechanisms out of that balance, the body will move into a state of disease and its organs will be compromised. One can be greedy and not wise as to continuously reward oneself with unhealthy things that will shift his body out of the balanced state and cause him to be sick or even dead. Every country works by the same principle; instead of organs we have governments; we are protected by the military and strengthened by the people and various industries. When the country’s economy, military, health, and politics on the whole are functioning within a “normal” range (spending and taxing), that contributes to its homeostasis and the country is in its healthy state.
I stand witness that the middle class is already taxed too much. Majority are hardworking people who after years of saving and living frugally cannot even afford to obtain a plane house in most states but must restrict to renting of apartments. Remember, the greediness can lead one out of the healthy balance. If the overly rich of this country are protected by flawed tax codes, not only that they will individually, over time, become unhealthy but they will draw entire society out of balance and their country into an ill state. This is not a game where the winner takes all, but a conscious and well prepared program that just like a small surgery it might heart a bit, but the pain will be well worth a national stability and reputation, and no one would see the rich as evil but as respectful employment providers and hardworking business owners. The employees will respect them for the jobs and the country will patronize and depend on them as a crucial nourishment of its healthy state, the homeostasis.
Rick, if most rich individuals in this great country become wise and start sharing your view on wealth and taxes, the health and happiness of this nation would improve in no time.
Correction, meant to write a plain house not a plane house.
Rick,
It is true that we need to be able to discuss politics in a civil manner without bludgeoning each other. A simple look at the voting split in recent national elections makes it very clear that there is much support for both conservative and liberal mentalities, and we cannot be filled with hatred for one another. That being said, I believe we shold be careful when we deem a course of action that we believe in to be “patriotic” (see paying taxes), thus labeling those who disagree to be unpatriotic by default.
To those who would not buy Mr. Steves’ guidebooks because of his political beliefs, remember that there are quasi-expert travelers like me who recommend Rick’s guidebooks to all my traveler friends. Thus, for every one of you who abandon Rick because of his views on pot and taxes, there is someone like me who will recruit 5 new customers for him.
The winter of 2010 I missed out on a trip to Egypt due to very bad weather our cruise ship ran into. I dream of visiting Egypt and touring the sites. Steve I really enjoy the coverage you are giving people that have an interest in what is going on in Egypt. I look forward to the coming weeks of you sharing your travels with us. Thanks, GREAT JOB!!
Debbie
The comparison of Christians killed in Cairo (killed by Muslims because they were Christian) with Christians killed in Chicago (likely killed in gang-related violence unrelated to their religion) is a specious attempt to downplay the risk to an American traveling in countries rife with radical Islamists.
Nice post .. :)