In the United States, an argument that appears to be about money is actually something much deeper: a fight over the nation's character, waged between two archetypes at the core of the American dream. In one corner is the rugged, up-by-the-bootstraps individualist. In the other is the egalitarian, level-the-playing-field populist.
But these figures have been dueling in the national psyche ever since a band of rebellious Colonists dumped boxes of tea into Boston's harbor. So why is the notion of taxing the rich such a pervasive issue right now?
If you accept a paradigm of "the rugged, up-by-the-bootstraps individualist," founders of families of wealth have been that, but not progeny, and always bear that in mind in terms of estate and inheritance taxation. Progeny did not earn it. They were born into it by an accident of luck.
JOBS, GATES, QUAYLE. Start with Quayle. He is the easiest case. Inherited wealth in the nine-figure range. Little to no shown competence, certainly not at spelling "potato." His mediocrity was a part of George the First being a single termer. Since his stint in the largely do-nothing post of Vice President he has slipped into an apparent comfortable obscurity, one fitting his talents and demonstrated work ethic. Tax the bugger. Get some value to the nation from his being alive and sucking air.
Jobs, other end of the spectrum. The true Horation Alger in the three. Given up for adoption at birth, with a laboring family adopting him, and his friendship with Steve Wozniak leading to the two of them building and selling a "blue box" device aimed at defeating ATT's then excessive long-distance phone tariffs by electronic wizardry capable of bypassing the monitoring and billing hardware/software in which ATT placed reliance. It being illegal to do that, Jobs and Wozniak might have ended up jailed in an alternate scenario of the "up-by-the-bootstraps" saga. There was the Apple II, the IBM PC as that mega-firm's Apple-killer (complete with a Chaplinesque Little Tramp advertising campaign showing IBM's view of the desktop and those Americans who might buy that low end of the IBM product line offering). It was low power, character based, the equivalent of a dumb terminal for a mainframe, with a floppy drive, etc. Dragging the market, Jobs licensed Xerox GUI technology for Apple, the McIntosh Apple went onto the market, and Microsoft took up the idea of a windowed graphic user interface, etc. Jobs was wedged out at Apple, started Next, purchased Pixar, and when Apple was so low in market value that Sun considered purchasing it, Jobs returned to run the firm and made its desktop offerings appealing so that the firm again prospered. Then there was iPad and iPhone and then Jobs died a month or so ago.
Gates, the legend, has much truth to it. He and Allen and Balmer and a handful of early geeks in Albuquerque (before the move to Seattle) ended up pushing a questionable looking little startup into a mega-corporation in my lifetime.
Okay. So is Gates the by-the-bootstraps equivalent of Jobs? Consider that he was born into wealth, banking money on his mother's side his father a lawyer, and he went to the most prestigious private school in Seattle, Lakeside. The school early on had a computer and Gates was encouraged to help the administration program attendance and other software, in part as a teaching-learning experience and for the help of Gates' unusual talent in assisting the school. He did not drop out of some branch junior college to start Microsoft, he dropped out of Harvard. He did so only when his mother and the trustee of the ten million dollar trust his maternal grandfather had set up for him approved of his dropping out and dipping into the trust to finance a business venture proposal, writing software for the new wave "microcomputers" where the then cutting edge but now defunct hardware was being assembled and sold out of Albuquerque. The famous Gates mugshots arose from his then inclination to drive his Porsche, in Albuquerque, above speed limits. Details remain hazy, per the comment thread, here. He did not languish in jail. Bail was always easy, no hardship involved. There is more to the legend, and the rumor of how he got the nod for his then dodgy startup to write the operating system for IBM's little tramp PC. When IBM wanted to move to its PS/2 architecture, closing off the earlier open bus, and using a less-than-state-of-the-art Intel processor, the 80286 in a character based system running character based PS/2 on a monochrome monitor; Gates pushed them to go to a GUI, had the firm produce what IBM wanted, but also in a parallel channel put Microsoft's early windows operating system on the new Compac desktop having a color monitor and a mother board using the state-of-the-art Intel 80386 chip. It was well behind Jobs' McIntosh at Apple, but a push-pull on the industry against cash-cow IBM interests - and if Gates is to be credited with anything it is in mimicking Jobs' more advanced effort at the time, i.e., having the foresight to see when to play IBM's game and when Microsoft should play its own.
So, Gates and Quayle, each born on third base, Quayle thrown out and not advancing, Gates going on to score - big.
Bottom line - each of the three had opportunity, Jobs from a lower starting point, but each should arguably now pay an opportunity tax, one delayed, and not assessed against those who try and fail in business, the more frequent outcome, but the nation providing the opportunity, coupled with an out of ordinary success, is an arguable basis to presently tax the wealth the opportunities accorded Gates and Jobs yielded them. It is not as if a fifty percent marginal tax rate on a millionaire's marginal top thousand dollars of income would somehow magically disincentivize his seizing an opportunity to make five hundred bucks more of disposable income. It is sheer stupidity to advance any such "disincentivization" argument. And Quayle, choosing to be obscurely lazy in later life, why should his earnings as return on capital not be taxed - indeed taxed at a higher rate, since he's really put no valued added contribution into society - or no presently discernible public showing of social worth and contribution.
Finally, in reading the Monitor item, reflect over some of the tax rates and present proposals at play in Britain and continental Europe. Things need not be as lax on the privileged as we've suffered because of Reagan and Bush concessions to their class; heels resting on the shoulders of the rest of us.