It’s Not About Eating the Rich
I don’t believe there is a Punitive Option for the Rich in Catholic Social Teaching. There is a Preferential Option for the Poor. If taxing the rich at some higher level will make things better for the poor, then I might feel more excited about the policy than I do, But I don’t believe it will make much of a difference for the poor. That’s not to say I’m positively opposed to taxing the ultra-rich. It’s plausible enough to me that they’re under taxed. If raising taxes on them reduces the deficit (perhaps it might, at least a little bit), then that might be some good that comes out of it. But I don’t believe it will address the structural problems in the economy that are making the ranks of the poor swell, and filling the middle class with distress. —Jim Pauwels
The manifestation of the “structural problem in the economy” is that the top 1% (i.e. the “rich”) own 49.7% of all investment grade assets (as of 2007), including 62.4% of the business equity, 60.6% of the financial securities, 38.9% of the trusts, 38.3% of the stocks, and 28.3% of the non-home real estate. Or to put it another way, the bottom 90% owns a whopping 12.2% of all investment grade assets in the United States.
Equity would seem to be a problem. But if we pretend that it isn’t; that the top 1% or the top 10% deserve to control these assets at this level, we still have another issue that people don’t pay enough attention to. The 1% “rich” picked up 42% of all new financial wealth generated in the US economy in the 21 years between 1986 and 2007. A total of 94% of all new financial wealth went to the top 20% of the population. There are two things to note here. First, when wealth becomes this concentrated, the bottom 80 or 90 percent of the population becomes strongly affected by the economic decisions of a small number at the top who control most assets. This means that contrary to what people like Herman Cain say, one is simply not solely responsible for one’s economic situation. Second, this concentration of wealth is also a concentration of political power. We have seen this political power lead to deregulation, the destruction of the union movement, and other things which have led to a small wealthy elite gaining more and more control over productivity increases that all of us have taken part in and sacrificed for. The tide is not lifting all boats any more. And while I will agree with Jim that there is no Punitive Option for the Rich in Catholic Social Teaching, I will submit that this isn’t (just) a problem of the poor. This is a problem of one small group of people dominating all social resources. This is what is destroying the middle and working classes. At the very least; at the very minimum, we have a moral right to live in a society where the rising tide lifts all boats. Yes, if we do what we need to do politically and socially to make things more equitable the rich will no longer have their own way and they will look at this as a punitive movement against them. But there is no Punitive Option for the non-Rich in Catholic Social Teaching either.