Tag Archives | tax the rich

Tax Reparations…for the Rich?

Forbes.com has just published the latest column by Yaron Brook and Don Watkins, which looks at the role class warfare rhetoric is playing in the debate over taxing the rich.

Americans, historically, have not been envious of wealth. The predominant attitude has been: let a person make as much money as he can, provided he earns it. The reason class warfare rhetoric has been effective of late is because the practitioners of class warfare have largely succeeded in painting the rich as unproductive parasites.

[...] if we’re talking about the creation of wealth in a division of labor economy, the most productive Americans don’t benefit the most: They contribute the most. Thirty years ago, if you were a shop owner, you spent a large chunk of your time poring over inventory, keeping your books, clinking away at your calculator, double checking your numbers, and going through enough correction fluid to whitewash a fence. But thanks in large measure to software pioneers like Microsoft founder Bill Gates, most of those tasks now take a fraction of the time, can be performed far more accurately and have become so simple that you can probably delegate them to an entry-level clerk. You gave Bill Gates a few hundred bucks; he gave you a better life.

Super-wealthy Americans — men like Gates, Warren Buffett and Fred Smith — are predominantly thinkers and innovators who succeeded by contributing new ideas to the productive process. Not just new inventions, but new methods of organization, marketing, worker motivation and production, distribution and finance. That’s to say nothing of the fact that wealthy people are the primary contributors of capital to the economy — the factories, tools and technology that make the average American worker hundreds of times more productive than his Third World counterpart.

This is what John Galt, the fictional character in Ayn Rand’s best-selling novel, Atlas Shrugged, called the “pyramid of intellectual ability” :

In proportion to the mental energy he spent, the man who creates a new invention receives but a small percentage of his value in terms of material payment, no matter what fortune he makes, no matter what millions he earns. But the man who works as a janitor in the factory producing that invention, receives an enormous payment in proportion to the mental effort that his job requires of him. And the same is true of all men between, on all levels of ambition and ability. The man at the top of the intellectual pyramid contributes the most to all those below him, but gets nothing except his material payment, receiving no intellectual bonus from others to add to the value of his time. The man at the bottom who, left to himself, would starve in his hopeless ineptitude, contributes nothing to those above him, but receives the bonus of all of their brains. Such is the nature of the “competition” between the strong and the weak of the intellect. Such is the pattern of “exploitation” for which you have damned the strong. [Atlas Shrugged]

You can read the entire op-ed here.

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