The Presidential debate this week discussed the story of Joe the Plumber at length. Joe wanted to buy a business and saw that under Obama’s tax plans he would be forced to pay an additional three percent tax on any income above two hundred and fifty thousand dollars. Since the business he was buying made more than that amount he was worried that his taxes would go up.
Obama explained his plan to Joe and at the end said that “if you’ve got a plumbing business you’re going to be better off if you’ve got a whole bunch of customers who can afford to hire you. Right now everybody is so pinched that business is bad for everybody and I think that when you spread the wealth around it is good for everybody.”
To my unbiased and nonpartisan mind (I am a British Citizen who cannot vote in this election and I am a fierce independent) Obama was making a cogent point. Obama thinks that by giving the average person more money in their pockets through tax breaks they will spend more of their money consuming which in the end will be better for small businesses.
In contrast, John McCain feels that if you give tax breaks to the rich and to businesses they will have more money to spend on innovation and hiring new people which in turn will grow the economy.
But who is right?
The question is who is right. Well I am not an economist; however, I do know a thing or two about human religion, nature and ethics. If given the opportunity most entrepreneurs and business people will strive to earn more money and create jobs no matter how high they are taxed.
There are no shortages of jobs or multi millionaires in the UK (or Israel) where taxes on the rich and on businesses are considerably higher than they are in the United States.
In fact, there are more jobs available in the UK which has a current unemployment rate of 5.7% than in the US that has a 6.1% current unemployment rate (Israel’s current unemployment rate is 7.3%).
Conversely, when left to their own devices most wealthy people—the exceptions always prove the rule—will not give significant amounts of their money to those less well off than themselves.
Redistribution of wealth
This is why the Jewish religion mandates that the rich must share their wealth—sorry to use the phrase—with those less fortunate than themselves. Now I have a natural and healthy distrust for government and I don’t really have confidence in them to spread the wealth around competently.
In addition, I admit that the best type of wealth redistribution would be voluntary where people just gave charity out of the goodness of their hearts. And in my book "Jewish Wisdom for Business Success" I talk about what we call “Spiritual Entrepreneurship” where the point of the entrepreneurial enterprise is to help others with the money made.
Most people, however, are trying to make money to live the American dream of a large home, 2.5 kids, an expensive car, a dog and fancy vacations. On the whole wanting “The American Dream” is a narcissistic quest rather than an altruistic one.
They can only see themselves
Here a Hasidic tale is pertinent. A Hasidic master came to visit one of his followers who had become exceedingly wealthy. As he entered the wealthy man’s home he saw poor people begging outside. And he watched how his wealthy follower walked by the beggars without noticing them.
Upon entering his host’s palatial mansion the Hasidic master took him over to the mirror and asked him what he saw, “myself of course” he answered. Then the master took him over to the window and asked him what he saw and he looked carefully and said, “I see poor people begging.”
The master asked him, “If this is glass and that is glass why do you see yourself in one and you see others through another?” The rich man paused for a moment and then answered, “because the mirror has a silver backing on it and the window does not.”
Then the master made his point saying, “The moment you add silver all you see is yourself and others become invisible.” The rich man understood the lesson and immediately scratched off some of the silver backing to his beautiful mirror so that every time he looked in it he would remember to think of the needs of others.
So given this reality Obama’s tax plan seems to be the better alternative—it seems to make the most moral, religious and economic sense.
Rabbi Levi Brackman is the author of "Jewish Wisdom for Business Success"