Atlas is shrugging
President Obama's whole economic recovery plan hinges on the richest two per cent of the country staying as wealthy and productive as they are now. What would happen if they disappeared?
Interesting comment over at GMU professors Donald J. Boudreaux and Russell Robert's Cafe Hayek blog, on Obama using the top 2% of American income "earners" (makers), to pay for a trillion dollars of aid to the other 98%:
"I'm in the target group to do the paying. I won't do it.
"I own my business and, unlike an employee, I have the option to work as much or as little as I like. At some tax rate, the marginal dollar won't be worth earning. I'll fire some employees, scale down the business or retire altogether and stick my money in tax advantaged muni bonds and do all the traveling and relaxing I can't do now. The tax advantage of muni bonds will NEVER go away because municipalities will scream bloody murder. If I'm not ready to retire and the tax rate gets too high, I may just immigrate to another country because it's very easy for me to get almost instant citizenship in any other country. I respond to incentives and I'm not incentivized by enslavement and neither is anyone I know. The specialness of this country is the lack of totalitarian regime and individual liberty. Once that's gone, this country is no longer all that special. You can call me evil or "not doing my part" because I'm not willing to work myself into the grave for your family instead of mine, but the reality is that unless you plan to start a Gulag, you can't make me.
"The question is, why should I be expected to work and risk more than you to provide you with the lifestyle to which you have become accustomed.
"Yes, it's sustainable to raise taxes on the most productive. However, it's not sustainable at a high standard of living. It's sustainable only at ever decreasing standards of living. France and Germany are good examples.
"There's a difference between the natural altruism that occurs between family members and confiscation by the state. I feel great when I donate to charity. I feel really crappy when I write the check to the IRS. Maybe I should figure out how to receive one instead. Seems a lot less time consuming."
And a response from another commenter:
"I've done a lot of rewarding things- working in inner city schools, coaching youth sports, and helping develop an innovative new part-time school model.
"What I haven't done is paid hardly any taxes for these 20 years or created hundreds of new jobs like I did in the 80's. [Jobs the grads of the schools he volunteered to help can make use of their degrees, diplomas, or certificates with, mind you.]
"Several years of paying mid six figure income tax bills convinced me that the marginal utility of earning over a million dollars a year just wasn't that great. The biggest difference in lifestyle for me between the big dollar days and now is having to fly commercial- but I don't need to travel much anyway.
"I'm not sure how you could get empirical evidence... I don't think making big money is that interesting to those who have already done it so why bother if a huge chunk goes to the government."
It's tough to feel much sympathy for the very rich, but it would be tougher still to "stimulate the economy" (and not drown the nation in debt) without them.
(Incidentally, sales of Ayn Rand's massive novel Atlas Shrugged have tripled.)
Interesting comment over at GMU professors Donald J. Boudreaux and Russell Robert's Cafe Hayek blog, on Obama using the top 2% of American income "earners" (makers), to pay for a trillion dollars of aid to the other 98%:
"I'm in the target group to do the paying. I won't do it.
"I own my business and, unlike an employee, I have the option to work as much or as little as I like. At some tax rate, the marginal dollar won't be worth earning. I'll fire some employees, scale down the business or retire altogether and stick my money in tax advantaged muni bonds and do all the traveling and relaxing I can't do now. The tax advantage of muni bonds will NEVER go away because municipalities will scream bloody murder. If I'm not ready to retire and the tax rate gets too high, I may just immigrate to another country because it's very easy for me to get almost instant citizenship in any other country. I respond to incentives and I'm not incentivized by enslavement and neither is anyone I know. The specialness of this country is the lack of totalitarian regime and individual liberty. Once that's gone, this country is no longer all that special. You can call me evil or "not doing my part" because I'm not willing to work myself into the grave for your family instead of mine, but the reality is that unless you plan to start a Gulag, you can't make me.
"The question is, why should I be expected to work and risk more than you to provide you with the lifestyle to which you have become accustomed."Yes, it's sustainable to raise taxes on the most productive. However, it's not sustainable at a high standard of living. It's sustainable only at ever decreasing standards of living. France and Germany are good examples.
"There's a difference between the natural altruism that occurs between family members and confiscation by the state. I feel great when I donate to charity. I feel really crappy when I write the check to the IRS. Maybe I should figure out how to receive one instead. Seems a lot less time consuming."
And a response from another commenter:
"I've done a lot of rewarding things- working in inner city schools, coaching youth sports, and helping develop an innovative new part-time school model.
"What I haven't done is paid hardly any taxes for these 20 years or created hundreds of new jobs like I did in the 80's. [Jobs the grads of the schools he volunteered to help can make use of their degrees, diplomas, or certificates with, mind you.]
"Several years of paying mid six figure income tax bills convinced me that the marginal utility of earning over a million dollars a year just wasn't that great. The biggest difference in lifestyle for me between the big dollar days and now is having to fly commercial- but I don't need to travel much anyway.
"I'm not sure how you could get empirical evidence... I don't think making big money is that interesting to those who have already done it so why bother if a huge chunk goes to the government."
It's tough to feel much sympathy for the very rich, but it would be tougher still to "stimulate the economy" (and not drown the nation in debt) without them.
(Incidentally, sales of Ayn Rand's massive novel Atlas Shrugged have tripled.)
posted by The Rise and Sprawl at
10:46 AM
2 Comments:
Bah, that "comment" has been popping up all over the blogosphere. The plain truth is that the upper 2% have not been paying their fair share, and the middle class has been paying theirs. It's time to balance the scales.
The great thing about the Us is that if these snots pack up and leave, someone else will eagerly take their place in the business world. And don't bet the farm on any of them actually leaving. They remind me of the celebrities who said they'd move to another country if GW was re-elected in '04. None of them folowed through.
So much puffery, so little conviction...
Everyone needs to pay their fair share and the income gap has widened exponentially in the last 20 or 30 years. Upper management should only be compensated at a level perhaps 5 times that of the average worker (as was the case even 40 years ago) and obscene income should be taxed at 90 per cent+ as it was in the US until 1964. As for job creation what jobs have primarily been created in the last two decades? Temporary minimum-wage or slightly above jobs with no benefits. The working class is worse off now than it was 40 years ago while the rich have reaped all of the benefits. Sorry, but it's impossible to live much beyond a cheque to cheque existence on $15/hr. and that is the average Winnipeg wage. Time to seriously rethink the system and I am so happy that finally there is someone like Barack Obama in power who at least wants to attempt to do this.
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