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Sunday, August 29, 2010

Redistibution of Wealth- I'm confused

Today’s newspaper contained a column written by Tom Scarritt, editor of the very conservative Birmingham News. He was commenting on a recent debate  between the candidates running for governor of Alabama, Robert Bentley and Ron Sparks. Sparks is in favor of a lottery to fund scholarships in the state; Bentley is opposed.

Here’s an excerpt for that column: “…remember government has no resources except what it takes from us. There is no such thing as government funding; there is only the redistribution of your money and mine.”

Statements like that irritate me. Terms like “takes from us” and “redistribution of your money and mine” have become catch-phrases of the right, implying that we, the taxpayers derive no personal benefit from government: that our money is spent solely to take from the rich and give to the poor. Such statements don’t seem to take into account that often when we leave our homes (many of which were bought with insurance backing from the federal government) to drive our children on roads funded in part by the federal government, to schools that receive federal funds, we do so without thought to the services our taxes are providing to US and our families. We have roads, schools, libraries, hospitals, small business loans, insured bank accounts, police and fire protection and a number of other benefits paid for by our taxes. So when it comes to taxes why do we continue to hear people using terms like “redistribution of wealth” as though the only people to benefit are people other than ourselves? We are paying for valuable services for us and our fellow citizens so that we all benefit.

On the other hand, in the marketplace, when we pay money for a product and/or service, the price has been marked up to cover not only the cost of the product or service, but the costs associated with the sale and marketing of that product/service, plus a salary for the owners and a return to the shareholders who invested in that product or service. We are paying more than the actual cost of what we’re  receiving. I don’t have a problem with that, as long as the mark-up and profit margin are reasonable. For years businesses told us they weren’t able to make a profit because labor costs were too high, so they laid off their labor force, moved their operations elsewhere and boasted how much less their production costs were now. But for some reason, prices didn’t go down- we ended up paying even more for many products (unless we shopped at WalMart, which is the subject of another blog, later). So it turns out we were paying to cover not only the necessary and reasonable costs of providing the product, but also to pay large dividends to stockholders and obscenely large salaries to corporate executives. But to Mr. Scarritt and those with similar views, that is NOT considered a redistribution of our wealth. I just don’t understand.