Monday, February 1, 2010

Taxes on the Wealthy

The concept of "raising taxes on the wealthy" packs a lot of notions into a deceptively short phrase, like "small cancer" or "local insurgents." Taxes remove money from very interested individuals and gives it to casual, inefficient groups. Could the government ever be a successful venture capitalist? Run a successful charity? Even build a specific project without the protection of a monopoly? The answer is no because government has too many mouths to feed, too many debts to pay, too many cross-purposes to cross. The government is a huge crazy quilt of competing factions, influence peddlers, friends and relatives--and these are just the legal conflicts with the task at hand; not even considered are the thefts, criminal inefficiencies, payoffs and errors of commission and omission of the amateurs, hacks and idiots involved.
Anyone who thinks taxes result in redistribution of wealth does not admit that the redistribution occurs long before the target group ever sees the residual. The government tax system is a huge dis-assembly line where money goes in and is removed at every station along the way until the tiny amount remaining dribbles out the end. It is a huge game of Telephone where the outcome is nothing like the planned input. So rather than the interested individual spending his money--and benefiting those he invests in or pays--in an efficient and targeted way, his money, when taxed, dissipates along the channel and becomes lost, like the "broken window theory" where the power and advantage of commerce barely keeps up.
Any tax, regardless of on whom, removes money from investment and commerce in the system and that is a tax on everyone.

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