I don’t care much about how much Bristol Palin, in particular, gets paid; but recent reports that she got paid something like $260,000 advocating for prevention of teen pregnancy serve to illustrate why it’s tough to be complacent about standard arguments about why the rich shouldn’t be taxed so much.
The standard argument is that rich folks got that way through hard work and poor folks are poor because they’re lazy. Bristol’s case illustrates the fact that, if you’re well connected, you don’t have to work all that hard or even be a logical choice for the job to get paid well. I have no idea how the numbers break down statistically, but it’s hard not to suspect that money is not generally rewarding the most valuable contributors. As the song says:
Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That’s how it goes
Everybody knows
Along similar lines, there was the story out of Wisconsin yesterday (h/t Indiana Law Blog), where an influential lobbyist’s son who, himself, had no particular distinction got a government job — despite the state’s loudly bemoaned financial problems — initially paying $61,000 and quickly followed by a promotion paying $81,000/year. He beat out a couple of applicants with a great deal of distinction but, apparently, no influential lineage.
It’s just not uncommon to see people prospering because of their parents and their connections. (Lest I be accused of liberal bias, we can throw in Rahm Emmanuel’s big payday after the Clinton years based primarily on Rahm’s fat rolodex.) Maybe it’s the same as it ever was. Maybe perception drowns out reality. But, when times are tough, it’s really tempting to start looking around for an aristocracy to blame.
Bradley says
Mitch Daniels’ Department of Workforce Development has been loaded with close connections, nepotism, and helping “friends”. Yes, Democrats do it, too (and all too often), but this Governor is the fiscal crusader and has supposedly “shrunk” state government. Well, if he means getting rid of veteran, knowledgeable, mildly-paid employees in favor of politically-connected, less knowledgeable, well-paid cronies, then yes he has.
Marc Lotter — Former Daniels PR person and then McCain/Palin ’08 press director. After that loss, DWD hired him in January 2009 for $75,000/year as a “Director/Broad Band Executive” level position (he supervised only 1 person, while some directors supervise over 100 people). A position of deputy PR director was created to assist him (more below). In 2010 he also became the IOSHA PR guy and earned over $81,500/year. He left in November 2010 to become Greg Ballard’s PR guy for over $95,000/year.
Valerie Kroeger — was a PR person for Indiana House Republican Caucus. DWD created a deputy PR spokesperson in 2009, which she got and paid over $40,000/year. Took over for Marc Lotter after he left. There are still two PR representatives at DWD.
Michelle Marshel — was Indiana House Republican Caucus counsel. In January 2009 she was given job as Deputy Commissioner of Communications, Marketing and Governmental Relations earning $87,000/year. She has three “Directors” below her (including formerly Lotter) who earn at least $50,000/year. These Directors have very few people actually working under them.
Dr. Gina DelSanto — Governor Daniels ’04 Campaign Policy Director and wife of a Fishers Town Council member, as well as former provost at Butler University. A brand-new Deputy Commissioner position was created just for her in January 2009 as “Senior Deputy Commissioner of Agency Policy and Performance” (even though at that time she was the newest deputy commissioner). Her salary was $91,000 per year.
Mary Johnson — formerly of National City Bank, she was hired as HR Director in 2007; in August 2008 she was made HR Director and Unemployment Adjudication Director. In January 2009, DWD re-created a Deputy Commissioner of Unemployment Insurance position and elevated Mary. While HR Director, three of her family members including two of her sons, were hired; recently DWD created a new position (under Deputy Commissioner Johnson’s line) and the job (with a two-level and $6,000 pay increase) went to her son who still works at DWD. Her salary is $85,000/year.
Mark Everson — former deputy under Governor Daniels at OMB and other exploits (the Red Cross adventures make a good read elsewhere online). Hired in June 2011 to replace a 3-months pregnant Teresa Voors who did not have another job to go to. He earns over $105,000/year, about $1,000 more than Voors.
There used to be 3 people running DWD; they now have 1 commissioner and 7 Deputy Commissioners (all making at least $85,000/year) with 1 other position they could still fill. There are about 24 “Director” positions which typically earn between $47,000 and $80,000 per year. It goes without saying that the easiest way to become a Deputy Commissioner or even a Director is to be a Republican or profess a loyalty to Governor Daniels (as seen by various comments or profiles online).
It is very good to work for the State of Indiana under Daniels if you are related or a good friend of the R family. It would all be possibly okay if DWD ran a competent agency, but, well, they do not.
Manfred James says
Why not blame the stupidity of the American people for turning this irresponsible teenager into a role-model and celebrity?
LindaM says
Bradley–These must be the people Daniels was referring to when he used the term priviledged elite. They are truly priviledged and elite.
Paul C. says
This type of compensation riles me up, as it is a payment for celebrity status, and very little else. Still, I would predict that there are hundreds of people working hard to earn their living for every Bristol Palin.
My other comment is that $260k sure seems like a large amount when you live in Alaska. That amount of compensation wouldn’t go nearly as far if you live in a high cost of living place like New York City or San Francisco. It would seem a bit unfair to punish hard workers in NYC who need every dime they earn based upon a few fringe people like Palin.
If you’re pro-tax, the good news is that Palin doesn’t exactly have a cheap tax bill, as I estimate her income tax bill on her $260k (before any deductions) to be about $68,000.
Buzzcut says
First of all, anecdotes are not data. You are going to have to show me how higher taxes on “the rich” are going to have any impact on our celebrity driven culture before I accept it, because we KNOW beyond a shadow of a doubt what higher taxes do to economic growth and overall wellbeing, and it isn’t good.
How do we know this? Look at the intercountry statistics on taxes per capita vs. GDP per capita.
Yes, there are many countries that have much, much higher taxes as a % of GDP. But inevitably, those same countries also have much lower GDP per capita. High taxes slow growth, causing these countries to fall behind the lower taxed US over time.
What’s really funny is that, despite taxes being lower as a % of GDP in the US, taxes actually paid per person are vastly higher in the US, because our GDP is so much larger. And the % of taxes paid by upper income groups are much more, because our tax system is more progressive. Yes, we tax the rich at lower rates than in other countries, but we also tax the poor and middle class MUCH less. In particular, we don’t have consumption taxes in the US.
So what is the bottom line? Guys like Doug want to increase taxes on “the rich” despite all evidence that it won’t actually raise more revenue. Why does he insist on doing so despite all evidence? Because it is not about raising more revenue. It is about feeling good about himself, that he “cares” about a problem, and more importantly, punishing those that he feels are responsible for the problem: the rich themselves, especially the Palins.
;)
Buzzcut says
Which is not to say that we don’t now have an aristocracy in this county, by the way. Charles Murray (Mr. Bell Curve) has a new book coming out where he shows how behaviors of the underclass and overclass are such that these classes are becoming very rigid.
Children of the underclass find it increasingly hard to escape, because of their own and their parents bad behaviors, while the children of the educated, rich classes are doing well because they are pushed to get an education, work hard, and not get knocked up out of wedlock, which in turn reinforces that class.
What Murray noticed is that people in elite colleges are increasingly the children of graduates of elite colleges, which was not the case from about 1945 to maybe 1985 or so.
Here’s a vid of Murray talking about this stuff.
Doug says
Easy, tiger. I’m willing to debate whether taxes stifle growth — or more properly, where the returns start diminishing — but you’re off on my motivation. I don’t spend a lot of time feeling bad about the less fortunate. Rather, I see a system that doesn’t seem to be functioning very well compared to how it has functioned historically.
I know that tax rates were pretty high on upper incomes back when we could do stuff like build highways and maintain our infrastructure. I know that families used to get along reasonably well on one income and suspect (without knowing) that a family with kids is better off where one parent can be home to tend to them. I know that I’ve been hearing how lower taxes lead to a better economy for the past 30 years, but if you look at the history of the last 30 years it’s been marked by lower taxes on upper incomes and stagnant incomes for most people of other incomes; coupled with ballooning federal deficits during that whole period. So, permit me some skepticism about how healthy lower taxes on upper incomes is for the economy and well-being of the United States.
As for the elite staying elite — I can buy that they’re taught better habits and, therefore, perform better. But, I also imagine it helps to have connections and to have a safety net if you take a chance and fail (or, say, want to take an unpaid internship) or maybe have easier access to start up capital. Despite our cherished mythology, we don’t really have a meritocracy. Don’t get me wrong, working hard helps — but hard work alone just isn’t sufficient for some people to thrive and hard work isn’t necessary for other people to thrive.
Buzzcut says
What you are missing, Doug, once again, is that anecdotes are not data. Yes, growth has been slow the last 30 years. But it has been slow everywhere, and the US has outperformed other developed countries.
And, yes, growth was good in the golden age from 1945 to 1973, when tax rates were high. But again, what were our competitors doing? Ironically, countries like France, Germany, and Japan did better than we did in that time frame, at the same time that they had lower taxes. In fact, as recently as 1967 the French worked MORE hours than workers in the US. But since then we have diverged, and it is taxes that are the cause.
As for your last paragraph, you can think that all you want, but it isn’t true. I’ve shown it using actual data from the census department, looking at household income, controlling for education, hours worked, and the number of income earners per household. More education, more work, and more workers lead to more income. How is that not meritocratic?
I don’t deny that coming from the elite has benefits. Mitch Daniels was arrested for pot possession when he was a student at Princeton, and he got off with a $350 fine. No doubt, that may not have been available to someone not of his class. But that doesn’t explain, say, my census household data (which tops out at $100,000).
Jason says
Buzz,
More education, more work, and more workers lead to more income. How is that not meritocratic?
You missed the second part of what Doug said. For the elite, the level of education, work, and number of people working your home has very little to do with your income.
Bill Maher, who I really CAN’T STAND, had an analogy that has haunted me. I still can’t buy in 100% to the idea of “punishing success”, but I also have trouble coming up with a compelling counter-argument:
That’s why the NFL runs itself in a way that would fit nicely on Glenn Beck’s chalkboard – they literally share the wealth, through salary caps and revenue sharing – TV is their biggest source of revenue, and they put all of it in a big commie pot and split it 32 ways. Because they don’t want anyone to fall too far behind. That’s why the team that wins the Super Bowl picks last in the next draft. Or what the Republicans would call “punishing success.”
You really should read the full article. As usual, Maher is a asshole, but inside his left-wing rant are some really hard points to counter.
Buzzcut says
Have you seen the Progressive Policy Institute’s “People’s Budget”? Right up your alley. 47% top rate, three “millionaires” tax brackets, in fact.
It is interesting that, even with all that AND uncapping payroll taxes (which in and of itself is a huge increase in marginal tax rates), they can “only” get taxes to 22.3% of GDP. My takeaway is that US taxes are already awfully “progressive”, and there’s not much more you can get from the upper incomes to greatly increase the total tax take.
Jason says
ARGH! I used “quote” instead of “blockquote” again! My apologies.
Jason says
Buzzcut, I wouldn’t assume a 47% top rate is as high as many would like to go. I got to get back to work or I would look it up, but I seem to remember something about taxes near or above the 80% mark in the top bracket somewhere around JFK or FDR.
Also, keep in mind that whatever that high rate was, it can be assumed there are more tax breaks now than there were then, as tax breaks seem to be something we add but hardly ever remove.
Lou says
This may be low grade thinking but Ive come to the conclusion that facts serves conservatives and anecdotes/pictures,film) best serves those with liberal learnings. Just had a conversation with one of my family members and she said its all the Dems fault if government shuts down because Obama wouldn’t compromise with Repubicans . I retorted that all people will remember is seeing is the Tea party folks holding up signs indicating they want the government closed down.Dems will certainly make sure these signs become widely seen.This is the anecdotal truth including explanation and what it all means.
One thing I learned in France is that when you discuss you better know how your opponent is educated before you make your points.We can always make a case with facts by leaving out strategic ones. Cultlure is a blinder.I will always remember listening to NPR during the early stages of Iraq war with a Bush spokesman having lists of facts about how well the war was going. An opponent would retort with on-the-scene anecdotes of school kids getting blown up by bombs.Thats the human side of war that is always compelling.
When I still a teenager back in Cold War era I used to listen to Voice Of Moscow( if I remember the name right) that came in loud and clear on the end of AM dial. They would give countless facts and satistics ‘proving’ how well Russia and the satellite countries were progressing under Communism..But all that we needed to counteract all of that was the Hungarian Revolution and reports and film from the scene.Later I learned that propaganda must be accurate factually or it is easily discounted,but that taken out of context can be intepreted in a deliberately biased way. But all factual of course.
Thats why to prove truth we need two lawyers and a judge who respects the Constitutional process.Doesn’t matter who is liberal and who is conservative as far as truth is concerned.It only matters which lawyer is better,and how the judge ‘leans’.Every tenet of law needs to be interpreted and liberal and conservative are equally valid as long as the law is systematically followed and open to public scrutiny .It always has irked me that conservativess say ‘liberals’ interpret and ‘conservatives’ just read what’s there.Everything is interpreted.
A frenchman once told me that there are no liberal americans. We’re all conservatives,including the Kennedy family.If you’re French, this is true. Facts are culture-biased.Thats why we currently have a politically -driven fight in this country about what our culture really is.So the facts that are chosen will will fit the cultural view.
Thomas Jefferson was a Christian, etc, so we need a Scriptural background to be enlightened what he meant.
Doghouse Riley says
I got to get back to work or I would look it up, but I seem to remember something about taxes near or above the 80% mark in the top bracket somewhere around JFK or FDR.
91%–then briefly 92%–raised from 84 by the Republican majority in 1951. Stayed that way throughout the Eisenhower administration, which explains why the economy never grew in the 50s. Substantially slashed in 1964, when we began the tradition of not paying for wars we weren’t going to win, cutting tax rates, and skyrocketing national debt. Oh, and insisting that the forty-five year history of the last two moving in concert is just an aberration.
By the way, the plural of “anecdote” is not “data”, and the opposite of
“anecdotal evidence” is not “randomly selected statistics which even so cannot be made to support a pre-ordained conclusion”.
Buzzcut says
91%–then briefly 92%–raised from 84 by the Republican majority in 1951. Stayed that way throughout the Eisenhower administration, which explains why the economy never grew in the 50s.
So what. It is absolutely, 100% completely recognized today that tax rates that high are stupid.
You can argue that the knee in the Laffer curve if above where we are today, but there is no argument that tax rates that high discourage generating taxable income, and thus economic activity.
Steve Stoner says
I don’t hate the rich. I don’t pity the poor. Everyone has to be somewhere.
stAllio! says
wow! 100% completely recognized, you say?
so if i bothered to look, i wouldn’t be able to find a single person advocating a return to a 90% top marginal rate?
Buzzcut says
Not a single non-stupid person, no.
stAllio! says
yes yes, and it is 100% completely recognized that all true scotsmen love haggis..
Buzzcut says
Well, I’ll give you that if it ain’t Scottish, it’s crap.
Doghouse Riley says
So what? So the foundation of your argument is disproved by the evidence. And that ain’t haggis.