The US tax-paying sucker

We largely remain silent as we are taxed to help Wall Street bankers make the payments on their Ferraris.

shmuley boteach 224 88 (photo credit: Courtesy)
shmuley boteach 224 88
(photo credit: Courtesy)
David Brooks wrote in last week's New York Times that what he learned on his most recent visit to Israel is that an Israeli's greatest fear is to be seen as a frier, a sucker. Perhaps it's a lesson that we Americans ought to learn. Over the past few months it is clear that Wall Street has made the American taxpayer its sucker. The New York Times reported on Sunday that Wall Street pay levels have now returned to 2007 levels, with Goldman Sachs now having "set aside $4.7 billion for worker pay in the quarter. If that level continues all year, it would add up to average pay of $569,220 per worker - almost as much as the pay in 2007, a record year." The problem is that Goldman Sachs, along with most Wall Street banks, has taken billions of dollars in government bailout money and, as the Times argued, rather than continue to pay their employees astronomical salaries "some of that revenue... could be used by bailed-out banks to pay back taxpayers." If you had told me that the day would come when the average American taxpayer, who makes $45,000 a year, would be asked to donate toward the income of those making at least 10 times more (let alone those making tens of millions a year), I would scarcely have believed it. But welcome to the modern American rip-off. When I lived in England for 11 years, I often pondered on the difference between the English get-in-the-queue mentality versus the sharper American elbow sensibility. We used to be a nation that just wouldn't take it. Two centuries ago we rebelled against the British for taxing our tea. But today we largely remain silent as we are taxed to help Wall Street bankers make the payments on their Ferraris. Look, if you're a wealthy American and you want to buy a yacht, God bless you. There ought to be no class warfare in a country that prides itself on rewarding people for entrepreneurial effort. But you can't ask secretaries, flight attendants and firefighters who are struggling to pay their utility bills to finance your butler. Where is the reform of Wall Street that we were all promised after the scandals that started with the collapse of Bear Stearns a year ago and continued with the million-dollar bonuses that were paid to the geniuses at AIG who left the American taxpayer with a $200 billion dollar bill? A FEW WEEKS ago my new Bear Stearns account manager attempted to hit me with triple commissions on a new investment strategy for my retirement account, after it had already shrunk by a third. Had I not asked questions, I would have been charged a percentage on the total amount invested, the mutual funds they were going to place my money into (which begs the question, why should I pay them just to hand over my money to be managed by someone else?), and finally a commission on every sale of stock that had to be liquidated to place the money in a managed account. After I raised a ruckus the fees were refunded. But surely the publication of the new best-seller A House of Cards detailing the fall of Bear Stearns due to irresponsible greed would have been enough for the firm to want to reform its ways. Apparently not. And this just seems indicative of the general direction of America. We're all expected to tighten our belts and get serious about saving money as our government engages in reckless spending and taxes us up the wazoo. I live in New Jersey, and if any of you are thinking of joining me you ought to first grow a third kidney to make sure you can pay the taxes. In my small town of Englewood, we pay some of the highest taxes in the nation. Yet the street down the road from me has potholes that can you descend into and resurface only about a week later. There are arcane rules about what you can leave for the garbage, so you end up owning a large vehicle to make regular trips to the local dump. The public school system spends on average $23,000 per child per year, even as their test results are some of the lowest in the state. Still, Governor Corzine, a man I know personally to be kind, dedicated and brilliant, thinks the remedy to our state's problems is to raise taxes further. Many of us are thinking it might be time to find a new home. And what shocks me while all this goes on is how little protest anyone hears. In our city a brave man name Raphael Bachrach tried to establish a Hebrew language charter school which might have allowed some of the religious Jewish parents to recoup a couple of bucks of their hard-earned tax money through the establishment of a school where Hebrew and Jewish history would be taught. It died a quick death through lack of support. ARE AMERICANS getting soft? If we would have lived under the George III, might we just have sipped our expensive and tax-laden tea with a few empty murmurs about the injustice of being taxed unfairly? About 18 years ago I started writing essays about the dangers of Wall Street. At Oxford I watched as scores of my students who were studying law and medicine abandoned their intended professions to accept high paying jobs in finance. What would happen to a society, I pondered, in which the brightest minds were no longer building anything but were simply taking $100 and making it into $200? Not that finance isn't important, but the industry became so dominant that it created a brain drain in nearly every other sector. Who would create the medical breakthroughs of tomorrow? Who would invent renewable sources of energy? But what I did not foresee is that even with all those brilliant people, Wall Street itself would collapse. The reason: money without purpose creates a zero sum game in which accumulation alone becomes the objective. The system is gradually bankrupted by greed. The people I personally know on Wall Street who never succumbed to that greed were those who saw money as a means rather than an end. They made huge amounts to give away huge amounts to worthy causes. In other words, they placed justice at the center of their financial enterprises. But a lot of us are feeling that there is little that is just right now in American tax and bailout policies. And since the cornerstone of every society is justice, it's a problem that has to be remedied before people lose faith in the system. The writer is the founder of This World: The Values Network. His most recent best-seller is The Kosher Sutra.