Once upon a time not so very long ago in a kingdom rather more near than far away there lived an insomniac princess. In general it was a kingdom designed more for princes and princesses than normal folks. Still this poor dear little princess tossed and turned at night at least two or three times now and then which disturbed her sleep and filled her empty head with unwelcome dreams that troubled it with thoughts of what was and what might have been.
The dilemma which consumed her was a slight pea of concern about taxes. It was the onerous burden not of paying more taxes than anyone else, but in paying any taxes at all that kept her so antsy at nights. It just seemed intolerable to a person of her unearned stature and slight knowledge of the world that her name should appear on any list that included the lower orders even as an afterthought.
Fortunately the King her father was more than solicitous after his daughter’s concerns even if they were irrational. After all, he had more than just a little pea of concern about any oblique assault which might affect his enormous finances too. So he convened his advisors together along with all the representatives of the people from throughout the land. As these “representatives” were all privileged and generally quite wealthy themselves - as the entire structure of the country (as it has been everywhere from the beginning of time) favored those with more money over those who had less - they could be expected to be as anxious as the King over the illness the symptom of the sleeplessness of the poor girl implied. Therefore the King knew they would be as duty bound as he was to represent their own interests over those of the people.
As expected, great exertions were employed to help the poor girl get her rest. Thinking her mattress too hard they filled it with the softest and most comforting thing they knew of, cash. Yet even that did not allay her persistent tussle with the plight of the little pea. So they filled mattress on mattress with money and piled them to ludicrous heights, until there were no less than a thousand mattresses for the little princess to lay her troubled head upon. Each mattress was stuffed with the long green down of a million dollars, totaling a billion dollars in all, to physically demonstrate to the little princess what little effect such a tiny little pea of taxes could ever possibly have on her extravagantly pampered lifestyle.
But this bed of a thousand mattresses, so high it took a dirigible to deliver her to at night, only lifted the sweet dear further from the floor of reality. Because even atop this billion dollars she was still occasionally discomfited at the thought of the existence of the pernicious pea somewhere far below. It was a psychological and existential affront to all her elitist pretensions and beliefs. The very thought of shared responsibility and equality with the common drudge and drone of people irritated her to distraction far more than the actuality of the pea of tax itself.
Now at the time of these important considerations there was an entirely frivolous issue which was taking up the time of the King. There was a poor working couple with eleven children who slept on no mattresses at all. The king’s government accepted twenty percent of all this family made every year as its yearly due and tithe. This couple argued that this tax was prejudiced and confiscatory and begged relief from it for the sake of their accidentally anorexic children. They seldom had enough money after taxes to do more than scatter a few coins on the concrete floor of their house to protect their children’s heads from the cold vagaries of the night. Even the slightest disturbance of illness, weather and crop failure, the high price of fuel, economic downturn, or any other unforeseen bit of bad luck beyond their control was sufficient to destroy their precarious financial balance and leave their children with nothing but dreams on their table to eat.
And this poor couple was not unusual but entirely representative of the majority of women and men in the realm who lived paycheck to payday, trying to make ends stretch around the wide girth of uncertainty which confronted them. Starvation, disease, lack of education, limited opportunities and permanent poor health lurked like a thief in the doorway of every underprivileged home in the realm. If a pea represented the smallest kernel of uncertainty amidst a sea of comfort for the well off, for the ordinary people their “pea” of concern was wide as the sea itself, everywhere and gigantic; overwhelming and inescapable in the ruthless severity and uncertainty it held over their lives. Yet as he surveyed his country through the wrong end of the telescope from his elevated castle turret the King, at the high end of the economic spectrum, could find no sympathy for the poor couple at the other end.
“Why, don’t I have enough problems with my own daughter that I have to worry about your problems too? I have a weepy princess who has to pay a million dollars in taxes per year. Is it any wonder she can’t rest? And if she can’t rest I can’t either. What is your basic paltry burden? $10,000? One fifth of $50,000? You call that a tax burden? What makes you people think you are big enough to catch my notice or pique my concern.”
“Yes, but please, your honor, she pays nothing next to us which can ever cause her discomfort. We pay far more of everything we own to you every year than she does. And that goes for all the millions of people you just mentioned who are impoverished by your odious policies. It’s almost as if they are perfectly designed as they are only to make all your little princesses richer at the expense of making the rest of us poorer.”
“Yes and it’s growing worse,” his wife added. “We are working twice as hard now to achieve less than ever before. When I was little my father could provide for us all by himself, not extravagantly but well, but now both of us must work a lot harder to achieve an even lower standard of well being than we knew then.”
This just made the king angry. “Nonsense.” He snapped his fingers imperiously at these little, little people and called over his new minister of finance. “Explain to these miniscule peons Sir Wilbur would you, who actually bears the greatest burden in taxes.”
Wilber whinnied officiously up. He was new, didn’t know any better and hadn’t been properly vetted as to which aspects of economic truth were to be avoided and which untruths exaggerated. In his excitement to please his boss he mistakenly assumed the king wished a correct answer to his question rather than the pat one.
“Well yes, Sire, as a percentage of net worth naturally the couple before you pays infinitely more than the princess.
What?”
“Yes as an obvious rule those who pay a higher percentage of a lower total are treated far worse by a tax code than those who pay the same percentage of a part of far more. Most of the princess’s money falls into the category of old money, which is artificially defined for tax purposes as money which is held for a year, then becomes untaxable forever after. Obviously this is an arbitrary tax benefit which favors only a very few people in society at the expense of everyone else. Most of your subjects need every dime of what they make every year just to get through it to the next and so can never hold onto money long enough for it to age in their possession. This is whole and inclusive taxation as all their money is always new and liable to be taxed. The bulk of the wealthy’s wealth though is free from annual (and therefore all) taxation because is just taxed marginally, fractionally, exclusive of their whole net worth. This is the cruel and crooked little hoax of how rich people accumulate more and more riches while the poor and middle class are kept in debt and in their place.”
Like an expert suddenly given a stage, Sir Wilbur was encouraged with how easily he was able to explain these arcane facts to the untutored King and excitedly pushed on, oblivious to the selfsame King’s growing alarm to what he was hearing.
“Then, you see, it is only the princess’s newest money, the iceberg’s tip of all she possesses, the percentage of money that the old money earns each year, that is taxed, not the older money which is the far greater amount that comprises the bulk of her net worth. The people before you are too poor to have anything but new money and so all of it is taxed in its entirety every year. So yes, naturally, they pay far, far more as a percentage of their net worth, what little they actually own, every year to you than the princess does. They are triply victimized because they have little to begin with, pay a much greater proportion of it to you and no matter how diligently and hard they work are deprived by the system of the opportunity of ever improving themselves as the very ground they stand on is continually being taxed out from under their feet.”
“Heresy! This is not what I wanted to hear from you, fool. Any benefit to us wealthy, we old money masters of the nobility, benefits these poor millions disproportionately by the diaphanous reflection of us they see in themselves. Isn’t our inspiration worth more than money? The very extravagance of our lives inspires them to be greater than they are even if our policies preclude them from the possibility. Talk to your ministers and priests, the religious duty of the peasants in the world is to be humble, grateful, loyal and subservient to their masters. Otherwise they might become as greedy and luxury loving as we are and we feel it is our duty to protect them from this evil of wealth that we willingly bear like a martyr’s ermine cross.
“No need to thank us. It’s the natural order of things which we must artificially maintain. We are bred for our positions in life and they for theirs. If we are willing to keep to our nature why won’t they keep to theirs? What are these lies you are telling us, Mister Minister? Don’t encourage them any more in this. To even glimpse my austere daughter’s reflection in a pool in passing is superior to any vision these paltry people could generate in their own lives. I’ve never heard of such tripe and nonsense as you utter. Where did you get this stuff from.”
But the hapless minister, thinking that the King must have merely misunderstood him, was too in love with his own verbosity by then not to continue his explanation of the beautiful mathematical harmonies implicit in his exposition.
“It’s this new thing called decimals, your Excellency. They’re really cool. Someone explained them to me once in school. So even if your lovely honored princess does pay a million dollars, or one mattress out of a thousand of her wealth, she is still taxed only one one-thousandth of a percent of her total net worth. Heck a single million dollar bill is a far greater cushion than most of us would need to live out the rest of our lives happily, let alone the 999 million dollar bills left to the princess to struggle by on. If someone didn’t tell her it was gone she would have never know it was missing. And yet more attention is devoted to her unjustifiable fears in the night than to all the legitimate life and death problems that actually confront your kingdom in cold light of day.
“And that’s odd because factually speaking, taxes alone can never actually diminish her wealth, not only is her principle untouched but for every million dollars taken away from her several more million must be added. Simple interest alone is more than enough to recoup all that she loses and so she’s still always earning far more than taxes can ever take away. Taxes for these people, on the other hand, always take what little is left them after their day to day expenses in the course of a year and absorbs the remainder so they always return to the ground zero of poverty and are unable to ever dig their way out.
“I’ve wondered long and hard at these injustices, your Majesty, and I guess it’s all because of decimals, they’re just too deceiving for most people to understand. Because if someone had a debt of a million dollars and amortized it by paying one hundred thousand dollars every year, it would take them ten years to pay it off. But if the debt was a billion, one hundred thousand dollars a year wouldn’t pay the debt down for 10,000 years. And that’s discounting the normal profit that such a large cache of cash normally generates in interest just by being in existence. Whew, decimals, I’m telling you, when you start to figure it out a billion dollars is a whole lotta moola.
“So while this poor family, poorer to begin with, though you may regard their benefit slight and their worth to the country negligible, in paying 20% of their net worth to you every year, the cost and burden of taxation to run the country actually falls much more heavily on them than on the princess. Collectively you have to squeeze all these turnips of the poor and middle class harder and harder to support your princes in the privileged lifestyles in which they’ve grown complacent. However, as you see, the tax code is really a shell game where the pea of prosperity that’s always promised to the people has long ago been secreted up the sleeve of the ones who designed the system to cheat the people. And the pure natural unfairness of the tax code corrupts everything else in the country, which is why it is so fiendishly complex, divisive, unpopular and hard to collect.
“So Sire, your tax code is programmed by design to be a giant thumb on the scales of the very rich against everyone else. Despite propaganda to the contrary and contrary to all justice and logic, the more wealth you have in this country the lighter the burden of taxation falls upon you. So, though our princess of paranoia pays a hundred times more in tax than the peasants before you pay her tax burden is nothing because she is literally 20,000 times richer than they are. The difference is not that she pays so much it is that she has so very, very much more money to tax to begin with that accounts for the larger sum, not the burden upon it, which is so slight as to be almost invisible.
Naively proud of his scholarly erudition which he was certain must have finally impressed and enlightened the King, Sir Wilbur beamed in his direction as he concluded this peroration.
“So, your Majesty, I have to conclude that the peasants standing before you are taxed much, much more heavily than the princess, notwithstanding the fact that she generally whines about it a whole lot more.”
But then, finally, from the incendiary look glowering in the eye of the King, the Minister, who was usually good at math, realized that he’d made a gross miscalculation. The King hadn’t wanted the honest answer to his question at all but the dishonest one. Oops. To disguise his mistake Sir Wilbur belated bleated out a few compliant words to cover his distress.
“Err, or at least that’s what some traitors and socialists would have us believe, Sire. And, of course, for saying so they should certainly be flogged. I personally would be in favor of decreeing that all further talk of decimals should be forever banned.” Still, when he timidly glanced up, he could see the king was not appeased and even much less amused. “Damn,” he gulped under his breath, “I knew I should have stayed in academia.”
And that happened to be the last anyone ever saw of Sir Wilbur the Economics Minister. Rumor had it his brains were mashed into a pulp and used as pillow fluff for some princess’s mattress somewhere while his hide was tanned for fine shoes.
Back to the present, Congress recently refused to raise the minimum wage to reward hard workers at the low end of the economic scale with a living wage. This total lack of grasp of proportion and the essential duties of their offices will ensure that more workers continue to slip beneath the poverty line and stands as an insult to honest work and free markets everywhere. At the same time they tried to make permanent the repeal of the inheritance tax to make certain that even the children of billionaires should never have to so much as suffer a pea sized pang of taxation for receipt of huge amounts of inherited wealth they never worked a day to earn. By this Congress is giving its blessing to the creation of a new overclass, a perpetually untaxed new nobility of extreme wealth coddled from cradle to grave from any shared responsibility of citizenship with the rest of society.
The lesson in this parable is that concentration of wealth in too few hands is itself as much of a threat to the operations of our free democratic government as would be a foreign dictator’s army camped on the Potomac besieging Washington. The founders of this country understood this danger, our current office holders have invited the enemy inside.
