There are two very popular memes in political discourse regarding income and taxation:
- Women get paid only 79 cent for every dollar a man makes
- The rich aren’t paying their fair share of income taxes
It’s easy to understand why these are popular. They’re easy to express (and put on bumper stickers), they make lots of people feel like victims, and they are a great way to drive wedges between large segments of the population. So for authoritarians, fascists, Progressives and other forms of just plain awful people, these are great “facts” to spout as loudly and as often as possible. But are they true?
As to #1: do women on the whole earn less than men? Yes. Is it because of discrimination, that evil bosses simply pay women less than men Just Cuz? Not even close. Whose fault is it that a woman gets paid less than a man, then? Simply put… the womans fault. Because, generally speaking, the path these women have chosen is a path that *necessarily* leads to lower paying jobs. Harvard economist Claudia Goldin was on NPR a few days ago and made some important points:
Disproportionately, women, particularly those who are mothers or who are taking care of others, would like greater predictability in their hours. They would like less on-call hours. They would like fewer periods of long hours. Well, those jobs are often the jobs – the ones that have the longer hours, the less predictability – those are the ones that are often the higher income occupations.
What this basically means is if you want to get paid the big bucks, you have to work the crap jobs. Sure, doctors get paid more than septic tank techs. But the doctors who are on call 24/7 get paid more than those who keep normal business hours; the ones who put in 60 hours a week get more than those who put in 40. The same goes for the septic tank techs. If you need to have predictable hours to take care of the rugrats… you get paid less. If you simply *want* predictable hours just because you don’t want to be on call 24/7, you get paid less. And it appears that women are more interested in more stable hours… and less of ’em.
Additionally: If you have two employees, A and B, who start at the same time, with the same skill set and work experience, you will probably pay them the same. If, two years in, A decides to take a year off… when A comes back, B will have put in one more year of work than A has. It doesn’t matter if A left to raise a baby, take care of a dying parent, study abroad, study a broad, hike the Appalachian Trail or follow Phish on tour, the simple fact is… A wasn’t at work for a year, while B was. B’s getting a raise that A’s not getting. B has not only put in more hours, B is more up-to-date on what’s going on. B has demonstrated more utility to the company than A has. And as it turns out, women are more likely to be “A” than “B,” generally due to the whole “raising offspring” thing.
When all that gets factored in, the “wage gap” shrinks substantially, to the point where economist Goldin said:
On average, when we measure these differences, we do find a residual gap. And in certain cases, we would feel very comfortable as researchers in saying this is discrimination. But it’s very, very hard to do that because it’s hard to find the smoking guns.
I’m a historian as well as an economist. And in the past, we really could find smoking guns. People would actually say, I pay women less than men. We don’t find that anymore. So we have to really search for the smoking guns. I know they’re there. I know that there is discrimination. How much is there – probably not that much.
So… sure, there’s some discrimination. But where? It does not seem to be readily findable.
OK, so on to Number 2, those dastardly richies not paying their fair share. Ummmm… well, the facts don’t seem to support that:
…after all federal taxes are factored in, the U.S. tax system as a whole is progressive. The top 0.1% of families pay the equivalent of 39.2% and the bottom 20% have negative tax rates (that is, they get more money back from the government in the form of refundable tax credits than they pay in taxes).
The squawking for a “basic income,” where people – all people – would get paid some amount of money annually simply because they’re alive (and if they are Democrats in Illinois, being alive probably won’t be a requirement) gets louder every year. As robots and illegal aliens make more and more of the minwage workers obsolete, you can bet that this call will only get *painfully* loud. Now, we already have lots and lots of people who are negative taxpayers, as described above, and the highest tax rates are paid by those who make the most. So how are the rich not paying their fair share? Should more people at the bottom be cut off from the responsibility of funding the government that takes care of them, while those at the top should be squeezed for more? If you do that, and many want to, you put the burden of taxation on a smaller and smaller group of people. And the smaller the group of people, the more influence they have… by pulling up stakes and moving elsewhere, by dying, by simply stopping. Remember, a lot of the people who want to tax the rich often say stuff like “aren’t you rich enough” or similar. So, let’s say the really high earners suddenly agreed with them and decided to retire. Then… this:
In 2014, people with adjusted gross income, or AGI, above $250,000 paid just over half (51.6%) of all individual income taxes
It wouldn’t take too many durned rich bastiches to decide to retire and live the easy life before the federal budget revenues implode.
