Again, I know I’m a little late into the discussion. I was just wondering what Joe the (unlicensed) Plumber would prefer: to pay 39% tax on his marginal income over $250,000 (note:NOT his total income) instead of 36% (assuming he does actually in the end earn that much profit after wages and other expenses), or to pay a pittance in tax under John McCain because he makes no profit as the economy is in the tank?

Look folks, all Western countries (even the US) made the collective decision throughout the twentieth century that there were certain services that were too vital to be left at the mercy of the vagaries of the marketplace. For both Europe and the US these included Fire, Police, Education, Infrastructure. Europe and Canada added Universal Healthcare to that while the US has thus far shied away from it. The US has decided to have a larger and more expensive military than European countries. Decisions were made to provide varying levels of welfare to those who weren’t gainfully employed for whatever reason. Thus taxes had to be collected to pay for these services to be available for the good of all citizens, rich and poor.

Decisions then had to be made as to how to share the cost burden of these services and again all Western countries made the decision that those with more money to spare should pay proportionally more than those earning less, mainly because they could afford it but also because to do otherwise would compromise the ability of those in lower paid jobs to earn a living wage for a fair day’s work.

Over the years, different countries have tweaked these variables to various extents and with varying levels of success. However the general principles of a progressive taxation system to pay for essential services has remained in place for decades, that is until it came under attack from neocons seeking a redistribution of wealth to the haves with the promise that it would trickle down. And with the election of George W Bush, they got to implement these policies leading to the economic crisis of today. So a modest rollback of the taxcuts received by the richest 5% to pay for tax cuts to the middle-class is not a Marxist wealth redistribution programme. (especially as the wealthy didn’t get this extra income through extra work, but rather through political manoeuvring) – it is a sensible return to the principles of a mixed market economy that served the Western World so well in creating and distributing prosperity reasonably well through the 20th century.

So please do not get scared by tags like “socialism” into making decisions that are not in your financial interest and that are to the detriment of the global economy.

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