Why Should the Wealthy Contribute More to Society?

Misconceptions and Reality

Many people seem to believe that the rich are obligated to help those in need, although this is not universally agreed upon. In contrast, what nearly everyone can agree on is that wealthy individuals and corporations must contribute their fair share.

This fairness doesn’t mean distributing wealth like charity; it means ensuring these entities fulfill their societal responsibilities. For instance, a CEO earning 50 times the salary of their lowest-paid worker is unethical. Profits made by companies after profiteering from customers during hardships like the pandemic should be seen as unfair gains, not as a philanthropic gesture. These entities must contribute to the very society that enables such vast profit margins, fulfilling their legal and moral obligations accordingly.

The so-called "trumponomics" tax cuts not only benefitted the rich and businesses to the tune of $4 trillion, but also neglected public needs such as healthcare and education. The argument is that if the wealthier segments of society pay more taxes, instead of unnecessary luxuries, we can achieve better public services for all.

Shared Wealth, Shared Responsibility

It’s not just about the individual wealth of the rich; it’s about all the wealth that has been built collectively. Even those who claim to work hard and deserve their success often rely on a vast range of services and infrastructure that was (and continues to be) funded by society. From the roads to the power lines, the rich rely on communal resources to maintain their success.

The belief that wealthier individuals should only pay for their services while others benefit free of charge is a misnomer. They should contribute just as much as everyone else to create a level of infrastructure and support that benefits all, not just a select few.

Role of the Federal Government

Another point of contention is the role of the Federal government. I think it is essential for the federal government to raise the economic floor to ensure people are fed, housed, and educated. However, this does not mean imposing confiscatory taxation. Instead, it’s about gradually lowering the economic ceiling to an appropriate level that supports these essential needs without stifling innovation and dynamism.

While I do not advocate for extreme wealth redistribution, I do believe that the concentration of wealth among a few powerful families endangers both democracy and the capitalist system. Unchecked capitalism can lead to social unrest and make socialism appear as a realistic alternative. As a social democrat, I believe that capitalism requires guardrails to protect the interests of all, not just a select few.

Addressing Capitalism's Flaws

Capitalism, while powerful, also harbors significant flaws:

Excessive Capital Inflow: Thomas Piketty's research has demonstrated that the returns on investments often exceed the growth of the overall economy. This siphons off resources faster than they can be replenished, potentially leading to systemic collapse. Market Failures: Joseph Stiglitz's work illustrates that without proper regulation, free markets fail to allocate resources efficiently. The lack of oversight allows powerful corporations to use ANY information asymmetry to their advantage, leading to oligarchy.

Thus, to sustain capitalism, it must be regulated to push stagnant wealth downward, thereby ensuring the system remains robust and dynamic. This is not about eliminating capitalism but about sustaining it in a way that benefits all citizens, not just the elite. Just as we do not let puppies eat themselves to death, we must ensure that our economic system supports the growth and well-being of all, not just the few at the top.

Ultimately, it’s about fostering a democratic capitalism where everyone has a fair chance at success, and no one is left behind.