There is an idiotic meme I often hear repeated in the cacophony of American “media channels”, and not infrequently also from the mouths of low-information viewers and listeners on call-in programs on radio and TV. Rich people are job creators, they say. We have to be careful not to tax them too much because otherwise they will stop creating jobs.
But unlike in many other countries, rich people are taxed very lightly in the United States, compared to the heavy tax burden imposed on what is left of the middle class here. How much did Mitt Romney pay in taxes? If I remember correctly, he fully disclosed only one year in which his tax rate 13.9%. He said that during that year he “did not make very, only about 19 million dollars”. Unlike every presidential candidate before him, he refused to disclose how much he paid in taxes in other years. And then he lost the election.
Self-employed translators like myself pay at least twice to three times what the idle super rich pay in taxes because, at least here in the United States, if you are self-employed, your Social Security (or self-employment) tax is often higher than what is called “income tax” in the “tax speak”. The super rich pay virtually nothing in Social Security taxes because this tax is capped for them at about the first 100 thousand dollars.
If it were true that light taxation of the super rich results in an abundance of jobs, the United States would be a paradise for people who are looking for work. Except that the official unemployment rate here (which has been manipulated downward to hide the fact that the realy unemployment is about twice as high) has been close to 10 percent since about 2008, unlike in countries with much higher taxation of the rich such as Germany or Austria where the unemployment rate is around 5 percent. The unemployment is still much better here than in countries like Greece or Spain, but much worse than in countries that some pundits here like to call “socialist Europe” where wealthy people pay much higher taxes than rich Americans, countries such as Austria, Germany, or the Scandinavian counters.
The way I see it, the super rich don’t really create a whole lot of jobs. On the contrary, they have been busy the last three decades destroying millions of jobs here by moving them to countries with cheaper and cheaper labor force, first to Mexico, and later to China. As there are expectations that the labor costs in China will continue to keep growing, they are now looking with interest at other countries where labor is likely to remain dirt cheap, countries like Vietnam and North Korea.
Considering how little money I make, at least compared to people whose effective tax rate is a fraction of what people like me have to pay, I do create jobs in the same country where I am actually living, namely in the United States of America.
Every year come January, I have to start calculating how much I paid to other freelance translators as I have to send the required tax forms first to these translators, and then to the Internal Revenue Service. And then throughout January, February and March I keep receiving the same tax forms from patent law firms, translation agencies and other freelance translators who were employing me just like I employ other translators.
Thousands of tiny but important freelance jobs are thus created by freelance translators and small translation agencies year after year, with taxes that are paid on both ends of the work chain, and I am quite confident that just about every recipient of the tax forms that are mailed in this manner pays a tax rate that is at least three times as high as what the super rich pay here when the term “income tax” is used according to its true meaning – all taxes paid on all income.
The super rich who pay a small fraction of taxes compared to the rest of us have so much money left over that they really have no choice but to sit on it (after they have given some of it to our politicians in return for more tax breaks). You almost have to feel sorry for them.
After all, there are only so many cars, houses, yachts, private jets, and private islands that they can buy – just yesterday I saw on French TV a reportage about how desperate Greece is selling off islands to foreign investors at prices starting as low as two million Euros. And how many people do they need to employ to take care of their many treasured possessions? Well, quite a few, but since there are about 10,000 translators who just like me employ other freelancers year by year per one extremely rich person, the number of jobs created by them must be miniscule compared to the number of jobs created by the remaining 99.9 percent.
And of course all of us employ not only other translators, but also the mechanics who fix our car, the teachers who (hopefully) educate our children, the plumbers who fix our kitchen sink, the hairdressers who cut our hair, the mail and newspaper carriers and dozens of other people who depend on the money that is left in our pocket after we have paid our taxes at a much higher rate than the people who makes hundreds of times more than we do.
And then I turn on the radio and hear another Joe Sixpack state with a Southern drawl and a steely conviction in his voice that we must not tax the rich any more because they are the job creators.
It is amazing to me how well the propaganda works here. At least in communist countries, nobody really believed what the official propaganda was saying.
(If like me you have always wanted to see Pink swinging from a chandelier, don’t forget to click on the Youtube video below).