The call to tax the rich has never been louder, and according to all indicators, the rich in America are doing quite well while the average person is not. I don’t know enough about economics to know exactly how that’s possible but I can wager a guess:
Rich people with capital (Capitalists) are good at investing their money, which makes them more money. Even in poor economies there are great opportunities, often based on the poor economy itself. A few simple examples might be investing in Top Ramen’s parent company. Oil to power the poor’s inefficient cars and to build their worthless trinkets. Short term lending (Payday advance companies,etc). Beer and Liquor. Tobacco. Poor people stuff.
Again, these are probably simplistic examples but you get the idea.
The above is, to my thinking, as it should be. If our rich also became poor we’d all be in the same boat, but it’d be a pretty shitty boat that would grow increasingly shitty and desperate. I have to imagine that these rich will build upon these opportunities and continue building until there are no more opportunities like it. Diminishing returns. Then they can go back investing in things that average poor people don’t understand like stocks, bonds, futures and commodities.
I think that the rich should be taxed more or less at the same rate I am (all said, I make very low six figures this year), but not more, and even if they are taxed a little less i’m ok with that. The reason I err on the side of not dragging the rich down with the commonest of us is threefold:
- Despite what you hear, the rich do invest in new industries and companies. There is no denying this. If they take big risks on the performance of the nation’s economy and people, then you should be afforded some benefits for doing so.
- Taxing the rich seems like a primer to raising taxes for everyone, it is just the first path of least resistance. I can imagine after taxing the rich all of the politicians in Washington coming on TV acting like they didn’t want it to happen, but now everyone must pay their part. We’ve already stuck it to the rich, let us stick it to you just a little bit.
- It’d be very easy for them to pack up and leave, if it came to that. Seems like nonsense but any legislation that made corporations and the rich uncomfortable would sprout cottage industries abroad. Take a look at some bonus and trading rules in England a decade ago to learn more about this: anyone with any capital or talent went to New York City or Hong Kong.
Nobody should be shouting for higher taxes for anyone, unless you truly believe that the government will or can help you somehow. Has the government ever helped me? Not for free, that’s for sure. But let’s assume that the government can help me, someone who perennially wants and needs help, let’s say. When does it end? At what point will the help i’m receiving be enough help to lift me off, and where is the floor and where is the ceiling?
What if the help i’m receiving (the floor) is only a few hundred dollars per month apart from what I can earn (ceiling)? What if this money is to pay for education and training for the people, who is to say this artificial influx of cheap funding won’t create yet another bubble, an education bubble? Maybe a renters bubble?
The government does not produce wealth, it only spends it, and does so inefficiently and with political bias (read: rich people).
The Automobile club charges me $2o per year for access to all of their services. They have too many to list but I will only compare the ones that overlap with those of the Department Of Motor Vehicles: vehicle registration, and title transfer. These are two core services of the DMV, and it costs the state far more than $20 per driving citizen, yet AAA throws in free towing and roadside assistance. And free maps. And free travel planning. And you never wait longer than 15 minutes, in a nice environment, with free water and coffee.
Who is to say that all of this government monies wont be redistributed back up to the same rich people that it sought to weaken, and instead made them stronger while making the poor even more reliant upon the rich? In my example above, I feel far more empowered by AAA than I do by the DMV. At the DMV I feel helpless and without options. At AAA i’m treated like a paying customer.
If you believe that the rich control the media, which they probably do, do you suppose you’d hear a peep from them if they were able to funnel all of this redistribution money back into their own pockets, thus actually making money on a steep tax increase? You’d probably see a lot more Warren Buffetts arguing for higher taxes on the rich in order to increase the redistribution and subsequent fleecing of the poor.
Remember folks, these rich are capitalists. If the government starts handing out cheese again capitalists will get into the processed cheese business. They know where the money is, and how it flows.
You might say, well we need big changes in this country. Our country is falling apart. 15% of Americans are on food stamps!
I’d respond, take a look at these supermarket stocks since the report that 15% of Americans are on food stamps:
It would seem that the capitalists know about this.
What would the government do with more tax money? Take money from AAA’s to build more DMV’s? Sorry, I don’t support it.