I recently wrote about the failed luxury tax attempted by the US that wound up destroying thousands of middle-class jobs.
It dawned on me that candidates seeking the Democrat’s nomination would gain huge support by advocating that the tax be reinstituted – their fans wouldn’t question the plan even if presented the evidence of its prior failure.
Facts don’t matter.
All the candidate would have to do is state, “it would be different this time… we’ve learned some lessons.”
That alone would be sufficient to convince millions of people to enthusiastically demand the reinstitution of a luxury tax.
But don’t let anyone fool you – it’s not about raising tax revenue.
Back in 2008, the moderator of a debate between Barack Obama and Hillary Clinton explained that tax revenue increased each time the capital gains tax rate was lowered and that tax revenue declined after each time the capital gains tax rate was raised. When asked if he would raise capital gains tax rates, Obama said he would “look at raising the capital gains tax for purposes of fairness” knowing full-well that tax revenue would likely fall.
Economist Thomas Piketty was the darling of leftists and tax zealots years ago because of his book Capital in the Twenty-First Century. It’s not that most of his fans actually read his book – they just agreed with the synopsis as provided by others: mainly, tax the rich more in every form possible.
What his biggest fans might be shocked to know is why Piketty actually supports taxation – particularly a 90% wealth tax for billionaires. It’s not actually to raise revenue. No, it is to punish them for being successful.
When asked about the mechanism that would make average people become more wealthy or better off by rich people doing badly, Piketty responded:
Oh, the simplest mechanism is that you have a destruction of wealth, the rate of return to wealth is going to increase, and you know, this creates space for accumulation from people who start from less wealth or zero wealth and that work for labor incomes they can invest (~ 46:30 into the interview).
Translated to plain English, the purpose of taxation is not to increase revenue and give it to others but to destroy wealth in the name of “fairness.”
You see, poor people will feel better after certain people are stripped of wealth. Using perverse moral reasoning, this is perfectly acceptable to Piketty.
But he completely ignores the obvious – people become wealthy because of their talent and skills in providing people with goods and services they desire at a price they voluntarily agree to pay. No amount of wealth destruction will turn untalented and lazy people into successful entrepreneurs.
But who cares, the envious hordes will feel better about themselves!
If it’s somehow escaped you, we’ve entered an age of pure emotivism – people openly demand that their feelings carry every issue at hand. Not reason. Not evidence. Not facts. Not objective rules. Just their feelings.
Historian Tom Woods suspects that the election of Donald Trump has fast forwarded the dissolution of the US by 50 to 100 years.
Many blame social media for the decline in political discourse and civility. I think it’s only revealed the paper-thin façade of decency people have with respect to their political beliefs. The gloves are off – we’re finally able to see the jealous and authoritarian nature of millions.
Have they ever cracked a book on economics? Could they give a mildly detailed explanation of the US tax system?
Of course not.
“Society must be organized according to my feelings. Disagree with me and you are literally worse than Hitler!” – they demand.
Obama and Piketty were simply ahead of their time. I suspect that tax zealots will rely less and less on economic arguments – not that they had a leg to stand on anyways (see here, here, here, here, here, here, here, and here).
In a recent poll, 44% of “very liberal” people agreed that “it’s good to see successful people fail occasionally” and 30% of “very liberal” people agreed that “successful people need to be brought down a peg or two even if they’ve done nothing wrong.”
This isn’t about billionaires.
It’s not even about millionaires.
It’s about everyone that is perceived to have more than them.
If you’re reading this, that probably includes you.