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Eat the Rich

Comment

I've often said that I wish there were some humane way to get rid of the rich. If you asked why, I'd answer that getting rid of the rich would save us from distraction by leftist hustlers promoting the politics of envy. Not having the rich to fret over might enable us to better focus our energies on what's in the best interest of the 99.99 percent of the rest of us. Let's look at some facts about the rich laid out by Bill Whittle citing statistics on his RealClearPolitics video "Eat the 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.

Similarly, when government taxes profits, corporations report fewer profits and greater costs. When individuals face higher income taxes, they report less income, buy tax shelters and hide their money. It's not just rich people who try to avoid taxes, but all of us — liberals, conservatives and libertarians.

What's the evidence? Federal tax collections have been between 15 and 20 percent of the nation's Gross Domestic Product every year since 1960. However, between 1960 and today, the top marginal tax rate has varied between 91 percent and 35 percent. That means whether taxes are high or low, people make adjustments in their economic behavior so as to keep the government tax take at 15 to 20 percent of the GDP. Differences in tax rates have a far greater impact on economic growth than federal revenues.

So far as Congress' ability to prey on the rich, we must keep in mind that rich people didn't become rich by being stupid.

Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

COPYRIGHT 2011 CREATORS.COM



Comments

6 Comments | Post Comment
I've given it a lot of thought and I just can't think of a way to make the rich taste good.

Don't get me wrong. If the combined efforts of our illustrious republican and democrat rulers actually do manage to collapse the dollar and/or pull our country into abject poverty, I'll rethink the matter.

But right now, I don't believe that there is enough Grey Poupon in the Universe to make a single rich person palatable, much less support a diet of rich folks. I'm sorry to seem negative, but the whole concept was too rich for my tastes in the '70's and doesn't seem any better now.
Comment: #1
Posted by: Ken from WI.
Mon Apr 11, 2011 10:16 PM


Read Mona Charen's article "Open Letter to Open Minds" in the Spokesmman Review. It was a very good article.

Am reminded of an interviews that I heard on the radio once. It was with a Cuban exile. It was after Fidel Castro defeated Fulgencia Batista and shortly after Fidel Castro revealed that he was a Communist. The exile was asked why the Cuban people didn't evolt after they found out that Castro was a Communist. The exile said the people didn't really have a choice. They just hoped the next ruler of the country would treat them better than the last one did.

Many times it is like jumping from the frying pan into the fire.

I'm not much of a fan of term limits, especialy in a Democracy, but some kind of term limits for dictators would be a good thing. I don't know how many of the protests in the Middle East will turn into a Democracy but they could help generate enought political reform to be beneficial.

Carl H. Dahlberg

Bonners Ferry, Idaho
Comment: #2
Posted by: Carl H. Dahlberg
Tue Apr 12, 2011 10:12 AM
I've often wondered if there's a causative relationship between liberal tax policies and their general dislike for firearms. That may seem strange, but hear me out... if you like and enjoy firearms, then you probably are well aware of many rules of safety concerning them. One of the most important is to always be aware of your backstop. Your bullet will only put a small hole in a paper target, but anyone standing behind your target may well be seriously injured. Liberals like to think that the rich have so much money that a little more tax won't hurt them (and that if it *does* hurt them a little, they probably deserve it for being rich). And to a certain extent they're right. If you're making $50 million a year, paying an extra $100K in taxes probably won't make a significant impact on your lifestyle, much as a bullet only makes a small hole in a paper target. But that $100K will make a huge difference to the gardener you can't afford to keep on staff anymore, or to the entrepreneur you no longer have the spare money to be an angel investor to, or to the car manufacturer who doesn't get to sell you a new car this year. The place where this analogy starts to fail is that liberals, unlike marksmen, have the audacity to turn around and blame their targets for the damage that they themselves have done.
Comment: #3
Posted by: Joe Patterson
Wed Apr 13, 2011 7:29 AM
Excellent article.
Comment: #4
Posted by: Ventura Capitalist
Thu Apr 14, 2011 10:16 AM

TO: DEMOCRATS AND REPUBLICANS - FOR OVER FIVE (5) DECADES and for whatever it's worth, the $6.2 trillion reduction in spending over the next decade IS NOT ACCEPTABLE-IMPERATIVE TO DO THESE CUTS IN NEXT TEN (10) DAYS! $14 trillion (and counting) you spend like money grows on trees; therefore, $14 trillion must be cut immediately! At no time, have Taxpayers heard the words "We're going to cut our salaries, benefits, and retirements!" As for all politicians, for what you've done to America, time is of the essence to sell all of you a one-way ticket to GITMO (or to the foreign countries you've sold America out to), take all your assets to pay off the trillions you've blown to wind, and send along everyone on the take along with you! Government involvement in the private business sector; that is, drug, insurance, auto, banks,and manufacturing companies must come to an end! By the way, the latest article someone wrote about America is a 'SERVICE COUNTRY!' I wonder if they know the only thing America is servicing is 'Social, Welfare, Unemployment and the incompetent, corrupt and greedy politicians!'

Read more: YOUR VIEW Bigger government is creating more debt not jobs
Comment: #5
Posted by: Shirley deLong
Sun Apr 17, 2011 10:36 AM
Re: Joe Patterson

This is an excellent example of what Dr. Thomas Sowell calls "second order effects." Politicians get stuck on the FIRST order effect--raise a tax, get more money. But they fail to consider the consequences of those effects. In this case, the firing of the gardener. As Dr. Williams states, they fail to see the elasticity in reality. Decisions have consequences. All the good intentions in the world can't bypass those consequences.
Comment: #6
Posted by: Ric Crouch
Mon Apr 18, 2011 8:57 AM
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