The left seems to believe that there's one simple solution to all of life's woes. Just concentrate power in the hands of a few politicians, then tax the bejesus out of the rich. Not just for government revenue mind you, but because, well, it's unfair. If not for the stinking rich, there would be no poverty, no discrimination, and the sun would shine everyday. We will immanentize the eschaton, once we finally all agree to just Eat the Rich!
Come on baby, eat the rich,
Put the bite on the son of a bitch,
Don't mess up, don't you give me no switch…
C'mon baby and eat the rich
Nevermind that Bill Gates, Warren Buffett, Donald Trump and Mark Zuckerberg combined, can't force anyone to buy their products, work for them, conduct any type of business with them, associate with them, or even talk to them for that matter.
Nevermind too that government politicians can force you to do whatever they want. Furthermore, if you object to their edicts, they'll send heavily armed enforcers to your door, lock you in a cage, and confiscate your property. You see rich people think their wealth entitles them to look down on others. They're mean. Besides, government guns and cages are benevolent and for your own good!
But in spite of their convoluted reasoning, the left does have it about half right. A lot of rich people do make money exploiting others, including those uber rich guys listed above. But this certainly doesn't apply to all rich people, or make being rich inherently bad. Not at all. Nor can raising taxes on the rich "help us all."
Eat the Private Rich?
This year, Congress will spend $3.7 trillion dollars. That turns out to be about $10 billion per day. Can we prey upon the rich to cough up the money? According to IRS statistics, roughly 2 percent of U.S. households have an income of $250,000 and above. By the way, $250,000 per year hardly qualifies one as being rich. It's not even yacht and Learjet money. All told, households earning $250,000 and above account for 25 percent, or $1.97 trillion, of the nearly $8 trillion of total household income. If Congress imposed a 100 percent tax, taking all earnings above $250,000 per year, it would yield the princely sum of $1.4 trillion. That would keep the government running for 141 days, but there's a problem because there are 224 more days left in the year.
How about corporate profits to fill the gap? Fortune 500 companies earn nearly $400 billion in profits. Since leftists think profits are little less than theft and greed, Congress might confiscate these ill-gotten gains so that they can be returned to their rightful owners. Taking corporate profits would keep the government running for another 40 days, but that along with confiscating all income above $250,000 would only get us to the end of June. Congress must search elsewhere.
According to Forbes 400, America has 400 billionaires with a combined net worth of $1.3 trillion. Congress could confiscate their stocks and bonds, and force them to sell their businesses, yachts, airplanes, mansions and jewelry. The problem is that after fleecing the rich of their income and net worth, and the Fortune 500 corporations of their profits, it would only get us to mid-August. The fact of the matter is there are not enough rich people to come anywhere close to satisfying Congress' voracious spending appetite. They're going to have to go after the non-rich.
But let's stick with the rich and ask a few questions. Politicians, news media people and leftists in general entertain what economists call a zero elasticity view of the world. That's just fancy economic jargon for a view that government can impose a tax and people will behave after the tax just as they behaved before the tax, and the only change is more government revenue. One example of that vision, at the state and local levels of government, is the disappointing results of confiscatory tobacco taxes. Confiscatory tobacco taxes have often led to less state and local revenue because those taxes encouraged smuggling.
Eat the Rich by Walter E. Williams
Not only will taxing the bejesus out of the rich fail to address our budget woes, but will change the behavior of everyone, thus reducing government revenue overall. So, the utilitarian argument for taxing the rich falls flat on its face, leaving envy as the one true reason to eat the rich. Envy by the way, is a lousy reason for doing anything.
BUT ... Like I said, they do have a point. Many of the world's richest people do indeed make money exploiting the rest of us. In these circumstances the, we certainly should eat the rich!
Eat the Government Rich!
Since everybody else seems to be coming up with plans on how to cope with the skyrocketing national debt, let me try my hand at it too.
My plan would start by cutting off all government transfer payments to billionaires. Many, if not most, people are probably unaware that the government is handing out the taxpayers' money to billionaires. But agricultural subsidies go to a number of billionaires. Very little goes to the ordinary farmer.
Big corporations also get big bucks from the government, not only in agricultural subsidies but also in the name of "green" policies, in the name of "alternative energy" policies, and in the name of whatever else will rationalize shoveling the taxpayers' money out the door to whomever the administration designates, for its own political reasons.
The usual political counter-attacks against spending cuts will not work against this new kind of spending cut approach. How many heart-rending stories can the media run about billionaires who have lost their handouts from the taxpayers? How many tears will be shed if General Motors gets dumped off the gravy train?
It would also be eye-opening to many people to discover how much government money is going into subsidizing all sorts of things that have nothing to do with helping "the poor" or protecting the public. This would include government-subsidized insurance for posh and pricey coastal resorts, located too dangerously close to the ocean for a private insurance company to risk insuring them.
Another Spending Cut Plan by Thomas Sowell
Both the political left and right are guilty of confusing the privileges of corporatism with the free market. Whether it's subsidies, bailouts, loan deals, protective tariffs, or regulations that help stymie competition, the special privileges that certain folks get come not from the nature of being rich, but exclusively by government fiat. There is nothing free or "fair" about this, and it highlights a serious problem with our politics today.
People are convinced that there's one political battle, and one political battle only - Democratic vs. Republican. Or liberal vs. conservative if you prefer. So, every issues boils down to either "for" or "against," with sides chosen mostly in opposition to the "other." I mean, if your enemy supports 'x,' it's gotta be really bad, right?
Trapped in this false dichotomy, neither the left or right can address the huge problem of corporatism head on, even though it's in both their benefit to do so. Instead, we're stuck arguing "for" and "against" abstracts like "the rich" or "corporations," without bothering to think about what's actually going on.
By arguing "against," the left doesn't bother to realize the regulations and taxes they push for benefit the largest and richest the most, while their bought-and-paid-for politicos handout untold billions to the largest and richest in the name of "green energy" or "saving jobs." By arguing "for," the right misses the boat in failing to realize they're defending corporatism, not free markets, while their bought-and-paid-for politicos violate everything they profess to believe as they handout untold billions in corporate welfare.
As the debate is framed now, corporatism wins either way. So, "We the People" either break out of this false dichotomy stupor, quickly, or we're doomed.
Aerosmith "Eat the Rich"