Talking back: Consumer power, the AMT, and why I sometimes dream of Indianapolis
The comment feature on the blogging software I use is a little clunky, and so this site isn't yet as interactive as I hope it will become. (This old media fogey would love some advice on this from you experienced bloggers out there.) As a first step towards turning this into a real conversation, I'm going to put up a regular "Talking back" post to discuss some of the commentary on this site. So this is the first of many.
On corporate responsibility, Mark Cericola writes:
You can change corporate behavior by two methods - legislation and consumer demand. If consumers refuse to purchase this affects corporation's goal of maximizing profits. Unfortunately, in our society consumers normally will forego moral companies for lower prices. I cringe when I have to agree that legislation is the most effective manner to enact moral/ethical behavior.I think Mark has this right. But the Democracy article shows that consumer's lack of conviction in the face of a great bargain is only part of the equation. We also lack reliable information. And the corporate responsibility movement often muddies the water, by creating voluntary codes of conduct that don't really help us differentiate the good from the not-so-good. Here's how the authors, :
Imagine a world with one voluntary code of conduct governing the operation of apparel factories. Let's call it the Golden Code of Conduct (GCC). This is a strong code that calls for the provision of a living wage, recognition of unions, and limits on working hours. Now suppose another set of companies who do not want to abide by the code, but still care about consumer perceptions, creates their own code, called the Super Code of Conduct (SCC). Their code lacks many of detailed provisions of the GCC, but it has some vague language about treating workers with respect. Companies must decide which code to adopt, and the SCC is clearly cheaper to institute. For high-minded companies that want to live by the more stringent code, the high costs could make them uncompetitive in supplying retailers. Meanwhile, the benefits are only significant if consumers can tell the difference between the two codes.And, of course, consumers usually can't.
On the AMT, we've got a robust debate about what counts as middle class. For example, Troy Smith from Chicago writes:
I am not clear on what the point was of your comment about Montclair, NJ and Newton, MA? Are you implying that the AMT doesn't really impact the "true" middle class, only the upper part of it?The median family income in 2004 was about $54,000. The AMT kicks in around $100,000. Whether you call a six figure family income middle class or upper middle class depends a lot on where you live. Many people who are affluent by the standards of the Chicago area, where I grew up, couldn't afford to buy a home in Montclair today. But if you drove around Montclair and didn't know what its charming old houses have been selling for lately, you'd probably call it a typical middle-class bedroom community, maybe a little nicer than most. Here's Dave from Yonkers, NY (which isn't nearly as pricey as Montclair):
I'm moving the family to an area that will give me almost a 2 hour one way door-to-door commute so I can live in a more 'affordable' community with good schools, but it will still cost me almost $500 month to park at the train station, take the commuter train to the city and then transfer to the subway. Then I get to pay income taxes to two states as well. After paying the mortgage / real estate taxes etc on my 'mansion,' buying diapers at Costco, and stashing a few bucks in college and retirement funds (no pensions for us!), that will probably leave me with enough cash on a monthly basis to get the oil changed in my luxurious 9 year old Honda.I hear you, Dave. I live in Brooklyn, where a brownstone in a fairly high-crime neighborhood might fetch $1 million. Sadly, I don't own one of those. This summer, I visited my sister's family in Indianapolis and I was kind of shocked at how much higher a standard of living they enjoyed for their money. (At least if you don't count the fact that it took us half a day and 60 miles of driving to find Spanish-style chorizo for my wife's peerless chili recipe--not so much of a problem in the Borough of Kings!) It's important to keep these big regional differences in mind when we talk about who's rich, who's poor, and who's getting squeezed.
i live in Denver, CO. We have traffic jams, high real estate costs, and crime that is growing. My cousin that lives eighty miles to the south in Colorado Springs makes 30% less than i do. He and his wife and kids live in a bigger house that costs 40% less than mine but is 1000 sf larger with a bigger lot. They have a much higher standard of living in a relatively crime free town. They have most of what we have in Denver, we just have ten of them here. If I could make what i do in the Springs, i would be rich down there. Here, i am just getting by. Location, location, location.
I'm your age and I think about the same things on a daily basis that you write about, but I never seem to come up with any answers. The only words of conclusion I ever seem to come to are 'that's just the way it is.'
It's not that I don't think people can't find their piece of the American dream, I wonder if we (individually) just don't spend too much time focusing on what we don't have rather than what we DO have.
A big chunk of the American dream is choice. Once we make choices we frequently do so at the sacrifice of alternatives. Somewhere along the way it feels like my (our) generation believes we can (or should) have it all.
We do have the blessings of a lot of choices, but we forget that some choices mean foregoing the alternatives.
What I would like to see is a true comparison of the total amount of taxes (Federal & State Income Taxes, Social Security, Sales Taxes and Property Taxes) to share of national income and wealth. Do the owners of the top 50% of wealth pay more or less than 50% of the total tax burden. The comparisons that I have seen show the top wage earners pay a disproportionate share of federal income taxes. I suspect if FICA and other taxes are added in, there share would fall significantly.
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