Folks like myself believe it's exactly the opposite. Very high tax rates or even small changes in taxes have very adverse effects on production...
PS: You think that Steve Jobs and Bill Gates wouldn't have done what they had done with higher marginal tax rates?
RE: Well, yes, because they just don't do it. They have to be able to get investors to sign up for their things. Those investors have to have disposable income.
- "Does U.S. Economic Inequality Have a Good Side?" - The News Hour, 10/26/11, Paul Solman interviewing libertarian law professor Richard Epstein.
In the last day or two, the local-ish "Occupy" demonstration Occupy Oakland has accreted some negative headlines, partly engendered by one participant with an AK-47 slung across his back, presumably to cover two amendments' worth of expression instead of one, who increased the threat of police response earlier in the day. Several of the protesters had the "we are the 99%" signs that are as close to a position statement as can be had of a somewhat diffusely disaffected group, and many protesters had already endured at least one rainy day in the name of advancing their message.
Part of the central issue uniting these groups is the trend toward greater disparity between rich and poor, and the degree to which government policy can either increase or reduce it. As I heard the Solman/Epstein exchange, my initial thought was, yeah, right, Gates would have said, why even go into business if they're going to tax me to death, assuming the rate had been, say, five percent higher at the point where he was pitching his operating system to Apple in the eighties. It's just not remotely plausible; entrepreneurs love complaining about regulations and taxes - well, sooner or later, everybody does - but their motivations are reliable; they crave excitement, power, big profits, interesting projects, but the government stuff is just a speed bump. And with the wind at their back even to the extent of Gates in 1986, what VC is going to say, sorry, I don't have the money...
But then inevitably I thought about the other side of the ideological spectrum. Courtesy the Left Business Observer, a small chart that illustrates pretty well a trend since 1968:
Here's a quote from the reliably left Noam Chomsky from back then:
"Roughly speaking, I think it's accurate to say that a corporate elite of managers and owners governs the economy and the political system as well, at least in very large measure. The people, so-called, do exercise an occasional choice among those who Marx once called 'the rival factions and adventurers of the ruling class.' "
This seems fairly overblown as well, and is pretty standard stuff for current plutocracy-phobes. Could Jobs have amassed that much wealth from his company if relatively "little people" had not become enamored of the gadgets? And furthermore, who knows categorically that he did not favor wealth redistribution as a policy, and go about throwing money at advancing those ends? And, for all that our president might be somewhat in the thrall of monied special interests, what does it mean, in the context of the Chomsky quote, that his campaign was primarily financed at a grassroots level?
It really is a shame we can't occupy ourselves with some talk about moderation, at least in rhetoric, but it appears that the Cain and Perry campaigns alone will make that improbable.
No comments:
Post a Comment