Define “Rich”

Rick Warren asked this question to both presidential candidates. The answers were revealing:

OBAMA:

“LOOK, HERE IS HOW I THINK BIT.  HERE IS HOW I THINK BIT AND THIS IS REFLECTED IN MY TAX PLAN.  IF YOU ARE MAKING $150 THOUSAND A YEAR OR LESS AS A FAMILY, THEN ARE YOU MIDDLE CLASS OR YOU MAY BE POOR.  BUT $150 DOWN, YOU ARE BASICALLY MIDDLE CLASS….I WOULD ARGUE THAT IF YOU ARE MAKING MORE THAN $250,000 THEN ARE YOU IN THE TOP 3, 4 PERCENT OF THIS COUNTRY.  ARE YOU DOING WELL. 

NOW THESE THINGS ARE ALL RELATIVE AND I’M NOT SUGGESTING THAT EVERYBODY THAT IS MAKING OVER $250,000 IS LIVING ON EASY STREET, BUT THE QUESTION THAT I THINK WE HAVE TO ASK OURSELVES IS IF WE BELIEVE IN GOOD SCHOOLS, IF WE BELIEVE IN GOOD ROADS, IF WE WANT TO MAKE SURE THAT KIDS CAN GO TO COLLEGE, IF WE DON’T WANT TO LEAVE A MOUNTAIN OF DEBT FOR THE NEXT GENERATION, THEN WE’VE GOT TO PAY FOR THESE THINGS.  THEY DON’T COME FOR FREE.  AND IT IS IRRESPONSIBLE, I BELIEVE IT IS IRRESPONSIBLE INTER GENERATIONALLY FOR US TO INVEST OR FOR US TO SPEND $10 BILLION A MONTH ON A WAR AND NOT HAVING A WAY TO PAY FOR IT.  THAT I THINK IS UNACCEPTABLE. 

NOBODY LIKE TO PAY TAXES….WHAT I’M SAYING IS UNDER THE APPROACH THAT I’M TAKING IF YOU MAKE 150 THOUSAND OR LESS YOU WILL SEE A TAX CUT.  IF YOU ARE MAKING $250,000 OR MORE YOU WILL SEE A MONTH DEFENDANTS INCREASE.  WHAT I’M TRYING TO DO IS CREATE A SENSE OF BALANCE AND FAIRNESS IN OUR TAX CODE.  ONE THAT WE CAN ALL AGREE ON IT SHOULD BE SIMPLER SO YOU DON’T HAVE ALL THESE LOOPHOLES AND BIG STACKS OF STUFF THAT YOU’VE GOT TO COME THROUGH WHICH WASTE A HUGE AMOUNT OF MONEY AND ALLOWS SPECIAL INTEREST TO TAKE ADVANTAGE OF THINGS THAT ORDINARY PEOPLE CANNOT TAKE ADVANTAGE OF.”

McCAIN:

“SOME OF THE RICHEST PEOPLE I’VE EVER KNOWN IN MY LIFE ARE THE MOST UNHAPPY.  I THINK THAT RICH IS — SHOULD BE DEFINED BY A HOME, A GOOD JOB AND EDUCATION AND THE ABILITY TO HAND TO OUR CHILDREN A MORE PROSPEROUS AND SAFER WORLD THAN THE ONE THAT WE INHERITED.  I DON’T WANT TO TAKE ANY MONEY FROM THE RICH.  I WANT EVERYBODY TO GET RICH.  I DON’T BELIEVE IN CLASS WARFARE OR REDISTRIBUTION OF THE WEALTH.  BUT I CAN TELL YOU FOR EXAMPLE THERE ARE SMALL BUSINESSMEN AND WOMEN WHO ARE WORKING 16 HOURS A DAY, SEVEN DAYS A WEEK THAT SOME PEOPLE WOULD CLASSIFY AS, QUOTE, RICH, MY FRIENDS, WHO WANT TO RAISE THEIR TAXES AND RAISE THEIR PAYROLL TAXES.  LET’S HAVE — KEEP TAXES LOW. LET’S GIVE EVERY FAMILY IN AMERICA A 7 THOUSAND DOLLAR TAX CREDIT FOR EVERY CHILD THEY HAVE.  LET’S GIVE THEM A 5 THOUSAND DOLLAR REFUNDABLE TAX CREDIT TO GO OUT AND GET THE HEALTH INSURANCE OF THEIR CHOICE.  LET’S NOT HAVE THE GOVERNMENT TAKE OVER THE HEALTH CARE SYSTEM IN AMERICA.

SO — SO I THINK IF YOU’RE JUST TALKING ABOUT INCOME, HOW ABOUT FIVE MILLION.  SO — BUT SERIOUSLY, I DON’T THINK YOU CAN — I DON’T THINK, SERIOUSLY THAT — THE POINT IS THAT I’M TRYING TO MAKE HERE SERIOUSLY — AND I’M SURE THAT COMMENT WILL BE DISTORTED, BUT THE POINT IS — THE POINT IS — THE POINT IS THAT WE WANT TO KEEP PEOPLE’S TAXES LOW AND INCREASE REVENUES. 

AND MY FRIEND, IT WAS NOT TAXES THAT MATTERED IN AMERICA IN THE LAST SEVERAL YEARS.  IT WAS SPENDING.  SPENDING GOT COMPLETELY OUT OF CONTROL.  WE SPENT MONEY IN A WAY THAT MORTGAGED OUR KIDS FUTURES.  MY FRIENDS, WE SPENT $3 MILLION OF YOUR MONEY TO STUDY THE DNA OF BEARS IN MONTANA.  NOW I DON’T KNOW IF THAT WAS A PATERNITY ISSUE OR A CRIMINAL ISSUE, BUT THE POINT IS — BUT THE POINT IS IT WAS 3 MILLION OF YOUR MONEY.  IT WAS YOUR MONEY.  AND YOU KNOW, WE LAUGH ABOUT IT, BUT WE CRY AND WE SHOULD CRY BECAUSE THE CONGRESS IS SUPPOSED TO BE CAREFUL STEWARDS OF YOUR TAX DOLLARS.  SO WHAT DID THEY JUST DO IN THE MIDDLE OF AN ENERGY CRISIS WHEN IN CALIFORNIA WE ARE PAYING $4 A GALLON FOR GAS, WENT ON VACATION FOR FIVE WEEKS.  I GUARANTEE YOU, TWO THINGS THEY NEVER MISS, A PAY RAISE AND A VACATION.  AND WE SHOULD STOP THAT AND CALL THEM BACK AND NOT RAISE YOUR TAXES.  WE SHOULD NOT AND CANNOT RAISE TAXES IN TOUGH ECONOMIC TIMES.  SO IT DOESN’T MATTER REALLY WHAT MY DEFINITION OF RICH IS BECAUSE I DON’T WANT TO RAISE ANYBODY’S TAXES.  I REALLY DON’T.  IN FACT, I WANT TO GIVE WORKING AMERICANS A BETTER SHOT AT HAVING A BETTER LIFE AND WE ALL KNOW THE CHALLENGES, MY FRIENDS, IF I COULD BE SERIOUS.  AMERICANS TONIGHT IN CALIFORNIA AND ALL OVER AMERICA ARE SITTING AT THE KITCHEN TABLE, RECENTLY AND SUDDENLY LOST A JOB, CAN’T AFFORD TO STAY IN THEIR HOME, EDUCATION FOR THEIR KIDS, AFFORDABLE HEALTH CARE, THESE ARE TOUGH PROBLEMS.  THESE ARE TOUGH PROBLEMS.  YOU TALK TO THEM EVERY DAY.”

So, $250,000 versus $5 million? I really believe McCain answered that question honestly. In his highly privilged enclave of the ueber-rich, anything below $5 million destines one for skid row! And his economic policies attest to his sheer isolation from reality: we have a collection of ideological slogans, a defense of his preferential option for the rich (I want everybody to be rich!), a lack of concern with the economic and ethical implications of high deficits, anecdotes about petty and irrelevant minor earmarks, a dose of voodoo (“cutting taxes and raising revenues”), and a lot of largely diversionary stump-speech blather.

As I discussed before, the contrast between the Obama and McCain tax plans is stark. Obama’s plan is progressive in the sense that it lowers taxes at the bottom and raises them at the top (the top quintile, and especially those at the very top of the distribution). On the other hand, McCain’s plan sees practically no gains going to the first three quintiles, with the top quintile benefitting greatly (and the top 0.1 percent doing best of all). In a sense, McCain’s plan amounts to telling all but the very rich: if you can become this wealthy, you can get a tax cut too– good luck with that!

Especially in an atmosphere of starkly rising inequality and stagnating median income, Obama’s approach is far more aligned with the notion of solidarity and the common good as taught by Catholic social teaching. It is more consistent with the idea that the fruits of development should be “distributed among individual persons and classes that the common advantage of all since “one class is forbidden to exclude the other from sharing in the benefits.” It fits with the paramount importance of an equitable division and distribution of this wealth” and the preferential option for the poor.