A great deal of current political discussion talks about inequality. It usually revolves around perceived injustices associated with “income inequality” and “wealth inequality.”
Democratic presidential candidate Senator Elizabeth Warren proposes an annual federal wealth tax, a balance sheet tax similar to the federal estate tax, which itself is a one-time balance sheet tax imposed at death. Taxpayers whose net worth exceeds $50 million would, under her platform proposal, pay an annual wealth tax.
Aside from a question whether a Warren Wealth Tax is unconstitutional (see Article One, Section 9), and the very tricky issues surrounding hard-to-value assets such as income producing real estate, closely held business interests, and intellectual property, it’s remarkable to consider the emotion and thought process behind the proposal’s attractiveness.
The language we use is powerful. Take a moment to compare “unequal” to “inequal,” which I acknowledge isn’t really a word but bear with me for a moment. If you Google “unequal” you’ll find references to “inequality.” Dan Sullivan of the Strategic Coach program, however, posits that the two words lead to two very different outcomes.
Except in the case of commodities, no two things are equal. In New York City, for example, the Empire State Building is unequal to the Freedom Tower. Yes, they have similarities in that they’re both very tall buildings located in Manhattan, yet they’re uniquely different and unequal.
Audi and Mercedes are not equal. Which is better? The answer is subjective, isn’t it? Einstein and Gershwin both used their exceptional intellect in completely different ways. They were unequal save the fact that they were both raised in the Jewish faith.
The thing about “unequality,” is that it’s an observation that has a neutral emotional outcome. Sullivan points out that we don’t expect things to be equal. If we constantly compare two things, we don’t appreciate their uniqueness. Uniqueness can lead to innovation. Uniqueness leads to a world of abundance.
“Inequality”, on the other hand, is rooted in envy and jealousy, which are synonyms that come from different angles. “Envy” typically can be defined as not wanting someone to have something that they currently possess, while the definition of “jealousy” is to want something someone else has.
When I was working my way through college and law school, I was jealous of my friends whose parents could take care of tuition payments and furnish them with reliable transportation. I didn’t begrudge my friends their family’s money, I simply wished that I had enough to get by without working two jobs while taking a full-time academic course load.
I wasn’t, however, envious. I didn’t want someone to take away their wealth and transfer it to me. When Bernie Sanders speaks of free college education, that’s what he proposes.
A free university education would be laudable if everyone wanted and needed a four-year degree. Some, however, aren’t academically inclined and would rather pursue a vocation. While college educations could be broadly defined to include vocational training, not all vocations require classrooms and instructors.
Is it fair to provide a secondary education to those that want it while not providing economic assistance of some kind to the young waiter, delivery driver or grounds maintenance worker? Would a “free” education entice those who simply want to goof around for a few years to take up classroom space?
Those, like Warren, who cry foul over America’s inequality speak of taking wealth away from the “haves” to give it to the “have nots.” The proposed solution to inequality could, if enacted in the wrong way, stifle the very uniqueness and innovation that economically sets our country apart.
The counter argument is worth considering as well. A recent New York Times opinion piece illustrated how the wealthiest few Americans have more than the bottom fifty percent combined.
This problem manifests itself most strikingly with health care. Most would agree that health care should be a basic right and not a privilege.
We feel so strongly about this at my firm that we continue to pay for each of our employees’ health coverage even though those costs have outpaced inflation at an alarming rate year after year, taking significant amounts away from our bottom line.
The well-being of those who put in a hard day’s work each and every day for us and for our clients outweighs the cost. But every small business will buckle at some point.
Returning to “inequality” and “unequality” let’s be mindful of the power of those words, and the solutions to which each leads. Inequality presumes a world of scarcity, meaning that our economic resources are a fixed pie for everyone to fight over. “Unequality,” on the other hand, presumes that we’re all uniquely capable to expand that pie. America is abundant, with a bright future.
The key question I therefore pose is whether there’s a different way to solve our big problems. Which services are truly necessary for our society to continue to thrive, and given those needs, how should our society view its unique talents and resources to provide those services?
© 2019 Craig R. Hersch. Originally published in the Sanibel Island Sun.