Sunday, October 24, 2010

Soaking the Rich

Almost by definition, people who are successful have benefited from some measure of good fortune. That fortune can take the form of obvious, material advantages--like access to advanced technology and good schools. Or it can take the form of more subtle, but still important, assets for moving forward in life--like good health or loving parents.

Yes, a good work ethic will take you far. And I know many well-educated professionals convinced that nobody works as hard as they do. (I’ve been known to indulge the thought myself.) But I’ve met many people at the bottom of the income ladder who work just as hard, for far less reward. Between 1980 and 2005, the richest 1 percent of Americans got more than four-fifths of the country's income gains. Does anybody seriously believe that the other 99 percent didn't deserve to take home a much larger share?


Moral Arguments for Soaking the Rich

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The leftard answer to all fiscal ills is the same--soak the rich. We all know this as theft, and theft is immoral. So, kleptocrats attempt to make a moral case for soaking the rich. Here is the argument in a nutshell:

-The rich benefit from advantages afforded to them by society.

-The rich owe a debt to society that they must pay.

Now, this argument is easily demolished. Consider a mugger who allows a woman carrying a purse to walk down an alleyway. He does not rob her. But he insists he is owed something for not robbing her. So, she needs to pay. And the best way to make her pay is to rob her. Neat trick, eh?

Without a doubt, living in a free society is a definite advantage in producing wealth. I doubt my life would be as prosperous if I had been born in North Korea. I got the luck of the draw being born in America. But what makes America great is that it is free relative to other places. My government does not rob me as much as other governments. So, for this great privilege, I need to pay more money? The argument demolishes itself.

People will claim that rich people like Paris Hilton possess no real virtue and are not entitled to their good fortune. Who is? Yes, she is one lucky bitch. Making her pay ginormous inheritance taxes might seem fair because it corrects the unequal distribution of fortune. Why not go ahead and bash her face in with a baseball bat so us ugly people won't feel so deprived either? And why not confiscate all lottery winnings while we are at it? The result is that people will stop playing the lottery. This is an important point.

Great advances in life require risks. Gambling on a new product and service may not pay off whatsoever. Or it may pay off huge. These successful gambles are the reason we have many of the wonderful things we enjoy today from cars to TVs to wonder drugs. We need these risk takers. As for rich brats, they have an alarming tendency to spend it all in profligate living. But some don't. Even lottery winners have a hard time hanging on to their winnings which shows that over the short term, you can be rich, but over the long term, people revert to the mean of their bad habits.

And rich people do give to society. If they didn't, they wouldn't be rich. By choosing not to consume but to invest, they build up capital which produces goods and services that the rest of us enjoy. If we didn't want this shit, we wouldn't buy it, and they wouldn't be rich.

Some will make the argument that government provides a security guard role. Certainly, a bodyguard who keeps the woman safe from the mugger deserves some payment, and I agree. But if the bodyguard pulls out a gun and robs the lady, he is no better than the thief. He is identical. It is not theft when the arrangment is voluntary, and there is nothing voluntary about taxes. You pay them or go to jail.

Finally, there is inequality and theft that the government perpetrates which hurts the poor. It happens when the government and the Federal Reserve spend and lend money they print out of thin air which erodes the value of the currency. This does go to benefit their rich constituents. These would be people like Warren Buffett. This is why Buffett loves the system so much. He directly benefits from the theft of your income by Fed inflation. If you get a little bit back in the form of a welfare check, this makes Buffett feel just peachy. This is "social justice." Makes you want to puke, eh?


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