Socialism and the Redistribution of Wealth

Last week, during the final Presidential Debate, both McCain and Obama talked about Joe the Plumber and shortly thereafter the media went wild and Joe the Plumber became the most famous plumber in America.

A few days later I was emailed by a very staunch Democrat in an effort to downplay the importance of Joe the Plumber's concerns. This person who emailed me tried to discredit Joe the Plumber because he is not a licensed plumber......that's it, that was the emailer's argument against Joe the Plumber.

Well here's the deal, it's true, Joe the Plumber is not a licensed plumber. However, this is because he currently works for a licensed plumbing company, and because of that he is not required by law to be licensed himself. The email I got tells half of the truth and strategically leaves out the rest of the truth in order to discredit Joe the Plumber and his concerns over Obama's tax increase plan.

I checked with my Accountant about Obama's desire to raise the tax percentage on businesses making more that $250,000 per year. I was curious to find out how negative the impact would be on these businesses. Would it really make that much of a difference? Would it be enough that employers might have to scale back their workforce, pay rates and/or company paid benefits in order to offset an increase in operating costs due to increased taxation? Well, as it turns out, if you have a good accountant you should be able to take advantage of enough tax exemptions that the impact is relatively inelastic.

However, while the tax impact may be inelastic, the concern about the Redistribution of Wealth(RDW) is still very real. I understand the theory of taxing employers more in order to help employees have an opportunity to start their own business (if they so desire). Obama's argument to Joe was, couldn't you have used that tax advantage as an employee five years ago? Well, in theory, yes. However, the fundamental concern is over who is controlling this. Should the Government tax the "more forunate" and redistribute their monies to the less fortunate to provide them with an easier path to start their own business? The idea that the government takes from one to give to another is not a new idea. In fact, many Economist, notably Adam Smith, have labored over this idea for hundreds of years. The problem is that the RDW is one of the base arguments for Socialism.

As the election comes closer and closer you have to decide how you feel about the very real notion of the government having more and more say into your daily life and professional path. The RDW is what governments do to level the playing field and to allow everyone the opportunity at an equal share of the pie. Is it wrong? That's for you to decide. Is it a very Socialist mindset? Yes. Personally, I think the government should leave the RDW up to business owners and the employees. However, one of the problems with Capitalism is that a capitalistic economic model does not requlate greed.

While at this point I have no doubt that Obama will win the election, I have huge concerns over his economic policy. Is too much government control a good thing? It's up for debate.