Tax the Rich

Few individuals have been more integral to the Obama-Biden project to “realign” the U.S. with Iran and strengthen the Middle East theocracy – at the expense of Israel, America’s Sunni Arab allies and partners, and U.S. national interest – than Rob Malley.
The lead negotiator behind President Obama’s signature Joint Comprehensive Plan of Action (JCPOA), Malley was brought back into the fold when Joe Biden came entered the Oval Office. Biden tabbed Malley as Iran special envoy to resurrect that nuclear deal. Last summer, however, the longtime progressive foreign policy hand suddenly had his security clearance revoked and was placed on unpaid leave while under investigation by the State Department and FBI for potentially mishandling classified information.

Huh?

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China is expected to emerge as the world's largest economy before 2030, with India becoming the third-largest by 2050. Both China and India are likely to surpass the United States, which is currently the largest economy in the world. The EU's share of the world’s GDP is projected to drop below 10%.

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A sexual assault lawsuit filed against Dallas Cowboys quarterback Dak Prescott earlier this year has been dismissed because it 'lacked merit'.

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Tax the Rich

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 give 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 the government has too many mouths to feed, too many debts to pay, too many cross-purposes to cross. The government is a huge crazyquilt 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 a 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 disassembly line where money goes in and is removed at every intervening station along the way until the tiny amount remaining dribbles out at 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 keep up.

Any tax, regardless of whom, removes money from investment and commerce in the system and dampens commercial development. That is a tax on everyone. Whether you want to subsidize those parasites along the way is another question.

A Capital Idea

In Capital, Piketty complains that the "r" (return) of inherited money is greater than growth, "g". That’s how we will end up with a rentier society.

 

Piketty insists that, since r exceeds g, the return to capital exceeds economic growth,  wealth of any kind will outperform work. Thus, according to the French economist, the rich will just keep on getting richer, and we’ll be left with an economy in which plutocrats are surrounded by us unsuccessful boobs, wandering around between Mad Max and a Star Wars bar scene.  Further, he goes on to say that the rich who inherit have access to much greater returns than the rest of us, making it a self-supporting spiral of economic misery.

This is great because there is justification in being angry at the rich.

 

It is interesting--but so is Lamarck.

The Sunday Times’s annual rich list, which was recently published, shows something different. Some 94 percent of the 1,000 people made the cut not by getting rich the old-fashioned way—by marrying or inheriting—but instead by making it. This correlates with the large sociological study in The Millionaire Next Door. It's a small sample and may not be indicative. But is does not agree with the Piketty theory, which has little hard support. It is doubtful that haziness of a theory will defeat it, though. Leaders and aspiring leaders always look for something, anything, to justify their power-concentrating, self-serving acts.

Leaders will always volunteer to set things right.

 

But--even if Piketty were correct-- the basic question goes unanswered: Can an order be imposed from above that will produce predictable results, however desirable? For example, how well has Iraq implemented the Madisonian blueprint that, in the American experience, is without doubt superior and worthwhile?

Tax the Rich, Feed the Poor

What is interesting about the "Tax the rich" cry is that there is so much resistance to it. Why would anyone object? They are different, isolated, often obnoxious and the high profile rich themselves want their taxes raised. Why is there a public debate?

My bet is that it is the other side of the equality coin. People want equal opportunity; they do not want to legislate results. This is the obverse of the objection to subsidies for people and groups.

The Rich are Very Much Like You and Me

Warren Buffet has publicly declared in favor of increasing taxes on "the rich."

I must admit I do not understand this. I do not care at all about the rich; what mystifies me is every one's preoccupation with them. What seems to have happened is that "the rich" is being presented as someone other than the rest of us. With apologies to Fitzgerald, aside from their checkbooks, that is untrue.

Increasing money in the government treasury has never resulted in improved government balance sheets; increasing government taxes just means the government spends more. There are two, just two, major problems facing our government money management: First, no one can tell what impact shifting national spending from individuals to government agencies means--if it means anything--and, two, no one can explain the difference--if there is one--between good government spending and bad spending.

If someone wants to start a discussion on a new good tax policy I would be interested, if someone wants to debate the merits of government spending I would be thrilled, if someone wants to discuss how to qualify government spending I'm on board. But if the debate is going to center on a tiny group of generally unpopular people as a proxy for raising taxes and government spending, that is disingenuous and I'm out.