July 25, 2008

A PENALTY ON PROGRESS

"People who make more are taxed more. That's being punished for being more productive. And then you're being rewarded for being a parasite. If you don't do anything, if you're just a bum, why, you can go on relief. You get something for nothing. That's a violation of rationality and morality in the short run too. The less you do, the more you get. The more you do, the more you're punished. That's a fine standard for a culture! The most productive people are punished the most for being productive; the ones who produce the least are rewarded for being parasites. Now, if I tried to design an irrational structure of a society, this is exactly what I'd pick." Andrew J. Galambos
In the winter I spend some time on a little island in southwest Florida. This tropical paradise runs seven miles long and is two blocks wide. A small toll bridge connects it to the mainland. For the most part, the four thousand residents (in peak season) are wealthy. One or two are in the Forbes 400.

Every morning a constant stream of autos and trucks cross onto the island. They contain people who work on the homes and the yards of the affluent. This constant flow of carpenters, maids, plumbers, landscapers, air conditioning contractors, handymen, pool cleaners, security guards, repair men, cable guys, gardeners and decorators make their livelihood off the rich. When taxes are raised on the wealthy, fewer of these workers will be employed.

Left-wing schemes to raise taxes to 60% are aimed exclusively at high-income earners. This money will supposedly go to equalize the low incomes of the subsidized underclass. The late economist, Murray Rothbard, had this to say about this tax gouging. "The modern welfare state, highly touted as soaking the rich to subsidize the poor, does no such thing. In fact, soaking the rich would have disastrous effects, not just for the rich but for the poor and middle class themselves. For it is the rich who provide a proportionately greater amount of saving, investment capital, entrepreneurial foresight, and financing of technological innovation, that has brought the United States to by far the highest standard of living – for the mass of the people – of any country in history."

Rich people and people attempting to get rich create the jobs. Unemployment will rise when taxes are increased. If you want to impoverish the populace of a country, tax the rich out of existence. In that way you can turn the country into a third world hellhole. There are no millionaires in Bangladesh or similar economic backwaters. The more million-aires and billionaires in a country, the higher the standard of living. All the former communist countries have learned this lesson. They continue to push tax rates lower towards 10%. Their economies are on fire. Eventually their standard of living will pass ours.
Our liberals and socialists intend to raise taxes and somehow pass out money to alleviate income inequality. That's the main plank of their campaign. Unfortunately, this redistribution scheme does just the opposite. It makes everybody worse off. Taking money from those who earned it for the government to waste on a myriad of follies reduces our national wealth and prosperity.

The emotional mix of envy and altruism, which comprises modern liberalism, pays no heed to century old lessons of economics. Rather, it relies on socialist misconceptions. The liberal tax agenda is the harbinger of economic retrogression and national failure. Every citizen at every economic level will suffer because of it.