Michael Bloomberg said something the other night that raised eyebrows. In a slip, he reminded faithful Democrats that he had paid his dues. Bragging about his $100 million in contributions that led to the Democrats retaking the House he said, “All of the new Democrats who came in, who put Nancy Pelosi in charge and gave the Congress the ability to control this presidency, I bough… I got them.”
The enormous influence of people like he and George Soros can cause even some crusty conservatives to consider stiff wealth taxes.
Taxing the rich is a proven vote-getter. It works almost every time. Former President Obama reminded Americans that these wealthy business moguls “didn’t build that!” He also said that no one “needs” that much money. This, of course was before he and Michelle “needed” a seven-bedroom, $12 million cottage on 29 acres overlooking the sea on Martha’s Vineyard. We assume someone built that.
John Fund, back when he was a writer for the Wall Street Journal, used a story to illustrate an important point. Feel free to use this with friends and co-workers. John asked people to do this little test. First, close your eyes. Now imagine that when you get home tonight, you open your mail and there is a letter from an attorney. As you read the letter, you suddenly realize that you have been named an heir to a huge fortune. You are about to become wealthy beyond your wildest dreams. Since this is a windfall, you decide you want to donate a significant portion to help your fellow man. So take a few minutes to consider who you might donate to.
(Pause, think).
Ok. So how many of you thought, “I know! I’ll donate the money to the federal government!”
Almost everyone will chuckle. Even liberals. Why? Because everyone knows that the least efficient way to help your fellow man is through the federal government. Warren Buffet and Bill Gates (who claim they don’t pay enough in taxes) don’t voluntarily donate to Uncle Sam. They have foundations.
Yet, for generations, the Left has demanded more tax money so that they can “help” people.
The Left believes that they can invest (spend) your money smarter than you can. Certainly better than the wealthy can. Once again, they believe in something for which there is no empirical evidence. The cynic might say that robbing Peter to pay Paul is just smart politics, figuring there are a lot more Paul’s in the electorate.
Sadly, this redistribution is corrosive to both Peter and Paul. Paul receives something he did not earn while Peter is denied the reward which he did. Paul is poorer in spirit as he grows in dependency. Peter is simply poorer. Both grow to resent the other. Money the government extracts cannot be reinvested to create more economic opportunities, which is what Paul really needs. Worse, the middleman in this exchange (the government) takes a disproportionate handling fee.
Income inequality is a real issue. The disparity between today’s billionaires and the poorest among us grows greater every year. We must ask, why?
If inadequate tax rates were to blame, Mr. Bloomberg could not have accumulated over $60 billion in one life time. He lives in New York City for crying out loud!
Taxing success is a fool’s bargain. It’s not the government’s business.
It is the government’s business to insure that there is adequate competition. Once a person or company achieves a level that warrants an invite to Davos, their behavior tends to change. They begin to think about how they might use their money and power to influence events. Saving the planet is in vogue. The super-rich also spend considerable energy thinking about how they can use their wealth to thwart any real competition. They’ve learned that governments can be very helpful. Governments grant patents, protections and juicy contracts. Regulations also stifle competition.
Teddy Roosevelt understood how the industrialists of his day were abusing their wealth and power. So he marshaled federal forces to break up the trusts.
Maybe it would be more effective to simply dust off those antitrust books and punish abuse rather than use tax rates to punish success.