Please, Tax Me More!
by Jim Davies, 11/21/2011
An extraordinary thing has happened: some rich guys are asking the FedGov to raise their taxes. Among the many millions who support government I've never yet heard of one who says "Rule me, please" - but this has to come close.
One of them was interviewed by Jeffrey Brown last Wednesday on PBS' News Hour: he was Garrett Gruener, of "Patriotic Millionaires for Fiscal Strength." He's a venture capitalist in a firm emphasizing health-care and biotech (which might be showered with largess if that industry were to be fully nationalized), who agrees he's part of the much reviled "1%" who have brought this country so much wealth, but he wants the alleged Bush "tax cuts" repealed. He says people like him can afford it, and if the government needs more money it should go ahead and raise the rates. Gruener founded AskJeeves, now Ask.com. I've tried that one along with other search engines, but far prefer Google. He has a Master's from Berkeley, and seems quite to misunderstand patriotism and economics.
Grover Norquist of Americans for Tax Reform (said to "oppose any tax increase, of any kind, at any time") had told him that if he wanted to pay more he should go ahead and write a check, but he characterized that fine advice as "pathetic." That is where we learn that his premises need to be closely examined. "The U.S. government is not a charity," he said. "We didn't take -- we didn't pass the hat when we decided to go into Afghanistan. We don't pass a hat when we decide whether or not to -- the country needs another aircraft carrier or to build a freeway or what have you. What we do is, we make a decision as Americans, and then we fund it." And of course, he's exactly right!
That's just the problem. If the FedGov were an entity run on voluntary contributions, then it would be smaller by a factor of at least a hundred, and would never have gotten us into Afghanistan or any other war at least since 1781, and would have left freeway building to for-profit roadmakers instead of governments who surveil the population by issuing "licenses" to use them. Gruener's entire response is saturated in collectivism; We, we, we, we, we, we, we and we. He is a government junkie, intoxicated by the impossible dream of a controlled society. Why, aside from his Berkeley training? - hard to tell, and research is clearly needed, but it's widely known that a lot of very rich people got to make their wealth, or at least to preserve it, by being very nice to government. All the so-called and so often-despised "Robber Barons" for example operated no monopoly save those that were secured by laws shielding them from competition. So I suspect that "Patriotic Millionaires for Fiscal Strength" may have something to do with lobbying for laws to favor its membership. If so, the payment of a few extra points of income tax would be an investment promising a rich return.
There's another possible reason this group of rich guys may want their tax rates raised. I speculate, but suppose they habitually donate to statist or "liberal" [sic] causes; say, 10% of their incomes. It's bizarre and foolish, but not unknown. Now suppose they would stop those donations if their tax rates were raised, because the extra tax they'd pay would be going to more or less the same destination. They would lose little or nothing at all, net - but meanwhile the cause (bigger government) would receive substantially more, from higher taxes on all the millionaires who are not members of their misguided group, and who would not in million years donate to such a cause! From their viewpoint, a tax hike would be a wonderful way greatly to benefit what they admire, at no net cost to themselves - and to hurt the charitable causes that oppose them, to which those other, more rational millionaires might currently be making donations. It's win-win-win!
In the interview with Jeffrey Brown, Gruener repeatedly said he had never once encountered a company which was or would be deterred from hiring an employee because of a higher tax rate on its owners' salaries. This was to counter the reasonable claim that if you tax the rich more, it will cost jobs. Okay, let's allow that his experience was truthfully told. Elementary arithmetic, however, suffices to show the falsehood of his conclusion; money transferred from an employer to the government does necessarily and certainly remove his ability to spend it on such objects as he prefers. Those objects might be to hire an employee directly, or to buy a mansion or a yacht or a limo or cases of rare wine, or whatever; but however he spends it, he necessarily employs somebody. There is no way to spend money without employing someone.
But, Gruener might reply, that's true of the government too; if the money taken from millionaires is spent on building a new carrier or a new road or on having a ditch dug and re-filled or paying soldiers in Afghanistan, it also causes people to be employed. So what's the difference?
The difference is that if a real person spends money it goes to stimulate more production of goodies that real people individually want; whereas if government spends the money it causes the production of things government wants. And anyone who supposes those are in some way better for real people is assuming without a shred of evidence, morality or logic that government knows what is good for you better than you do yourself.
Come to think of it, that's the assumption underlying the very existence of government.