ShawnD said:
Since the US has progressive taxes, you need to make quite a bit more than the average before you pay in as much as you consume.
You're right. I didn't think that far enough through.
On the other hand, it can be argued that low income people pay their fair share by allowing companies and the economy to grow. McDonalds, for example, is a company worth billions of dollars, and it would be foolish to say that their success was not somehow related to their ability to pay low wages, and sell things at reasonable prices. If the labor market (worker shortage) had people getting paid $15/h to work at McDonalds, would McDonalds grow as quickly as it did?
Draw your own conclusion
I'm strictly talking about taxes and government spending. I hadn't thoughth about the value of workers to companies (...thinking about it below...). I'm completely aware that a healthy economy requires a wide range of income levels and that foreign workers fill a vital role by taking low wage jobs that Americans don't want. How many it takes before they become a drain on society, I don't know.
That said, I think contribution of an employee to the economy is also related to pay. That's kinda the main point of a market economy. The labor supply is a pyramid that is smaller at the top because the experience and education required gets thinner as you go up. That makes such people very valuable. That is also responsible for why the low-end college graduate isn't doing well these days: there is a glut of people with useless BA degrees out there that end up working as bank tellers for slightly more than what the high school dropouts at McDonalds are making. The pyramid just isn't linear.
Now more specific: Since McDonalds isn't a service company, no employee directly contributes to the company's income (ie, in my job, I have a specific billing rate for my time - the guy who sweeps the floor does not). Nevertheless, every employee at McDonalds has to perform a useful function, otherwise they wouldn't be hired (the guy who cleans the floor, for example, does it because if he didn't, customers wouldn't come back). So then the only measure of an employee's value to a company like that comes from supply and demand in the labor market. In a broader sense, my value to my company is set the same way, but by a different market - the market for engineering services. But, of course, the number of people who go into engineerg determines how many engineering companies like mine there are, which then determines via supply and demand what billing rate I can charge.
Bottom line: by and large, people contribute to the economy pretty much exactly equal to what they get paid, which follows directly from the basic rules of market economics. Put another way, there is no such thing as a job that is a drain on the economy.
Caveat: I hadn't thought about this issue in quite those terms until just now, so this may change a little as I mull it over some more.
