Sam Harris wrote a piece on August 17 on his blog entitled “How Rich is Too Rich?“. It was a genuinely thoughtful piece with some great points but he lost my hope when he used the line “how much wealth can one person be allowed to keep“. Allowed? By whom?
And what about the other side of the “How Rich is Too Rich” coin such as “How Much Stealing is the Right Amount?” or maybe “How Much Waste is There in Government” or even “How Lazy Can You Be?
When it comes to private individuals generating wealth (even one dime) by performing a legal service or selling a legal product, the profit generated after belongs not to society but to the individuals and stakeholders that took the initiative to make it happen.
If we want to start throwing around the “allowed” word the very first place we should put that word is with the federal government. We should not be asking how much Steve Jobs should be allowed too keep, but rather how much should the government be allowed to have from the taxpayers generating the wealth.
The US Government holds its position at the consent of the governed, and people are mad because government is using billions of dollars in taxpayer money to go way beyond the core purposes of government. By and large Americans don’t have a problem with the concept of paying taxes, they have a problem with paying taxes when the tax revenue gets squandered.
Taxpayers who have trouble making ends meet are not thinking about Steve Jobs, Bill Gates, or anyone else like that, they’re thinking about their mortgage, their gas bill, groceries, medical bills, and other items that they could purchase if they only were “allowed” to keep more of their income.
They get mad because of the sheer waste all around them, such as this $600,000 gurgling toad sculpture. How many tax paying households had to chip in to pay for this? Don’t you think whatever monies were taxed and redistributed to purchase this commissioned work could have been put to better use by the people that earned that money? There is an almost limitless supply of examples of government waste we could discuss – here’s 50. It’s government that is “allowed” to keep too much money not individuals.
Sam posits a question and gives his answer.
“How many Republicans who have vowed not to raise taxes on billionaires would want to live in a country with a trillionaire and 30 percent unemployment? If the answer is “none”—and it really must be—then everyone is in favor of “wealth redistribution.” They just haven’t been forced to admit it.”
What about framing the argument this way?
How many Democrats who have vowed to raise taxes on anyone making over $250,000 would want to live in a country where employment goes to 30% because business owners limited to $250,000 in income have no incentive to grow past that – because anything over that amount would simply be confiscated?
Which do you think is a more likely scenario? Clearly the second because nobody is close to an individual wealth of a triilion bucks, but we have all kinds of Democrats wanting to raise taxes on people who generate over $250,000 in income.
In Mr. Harris’ blog post, he brings up the news about Warren Buffett’s op-ed wherein he mentions he’s taxed at a lower rate than his secretary (and that many Conservatives pretend not to find this embarrassing).
This is comparing apples and oranges. One is capital gains taxation and the other is ordinary income taxation. Mr. Buffett could always choose to pay himself ordinary income. Why doesn’t he? Mr. Buffett instead of pledging his billions to the Gates Foundation could choose to disperse with his wealth in some other way that’s not maybe as tax efficient.
Moreover, as this article points out, even if you flat out took all the money the super wealthy had you wouldn’t even put a dent in the problem. The root issue is not how much private people earn, it is the amount government spends. This tired argument of taxing the hell out of rich people simply because they have it does not solve the problem. Government must shrink.
And anyway, does anyone need a trillion dollars? Of course not, but that’s not the point. The point is does a need on my part create an automatic obligation on everyone elses? If the answer is “yes”, then those people answering that way are in favor of stealing, they just haven’t been forced to admit it.
The problem we’re facing in the USA (and indeed the world) is that for many people the answer is “to hell with property rights, I want my stuff”. They call this “social justice”. But what is “just” about taking from your neighbor simply because you deem him to be more than satiated?
We’re all looking down the barrel of ugly arguments and scenarios these days not because of productive, job-giving, wealth creating entrepreneurs, but because of government fools who get in the way of free markets efficiently delivering solutions to people. The very people government claims to help and champion are the very people that get wiped out by government.
Are free markets perfectly efficient? No but they are far more efficient and “fair” than centrally planned economies where a few people pick winners and losers and there are only but a few winners. Remember fairness is a two lane highway.
In the USA we do have “crisis of inequality” and on a global level it’s even worse, but government interference, corruption, and waste only exacerbates the problem. Americans (and likely most people in rich countries) do not want to live in a society with huge “inequalities” in wealth but the difference between Conservatives and Liberals is how we achieve that. One could also easily point out that we have a crises of inequality in effort put forth by many people.
Offering 99 weeks unemployment checks or incremental welfare subsidies for every baby you have while on welfare only keeps people down when they might otherwise get up on their own.
The brutal truth is some politicians would have it no other way. Until we elect people that limit government to what it is supposed to do instead of all of these superflous programs it won’t change too much.
If there is one place we should be pointing the “how rich is rich” question it is not at private individuals, it is at government.
Photo by Stuck in Customs