06 July 2011


I have known a fair number of very rich people during my life and the one thing that strikes me is that they are not that "different" from others, notwithstanding F. Scott Fitzgerald. They are often more acquisitive, but basically just have bigger or more expensive versions of what everyone else has, i.e. houses, boats, watches, etc. They are certainly not any smarter than others,nor are they particularly talented. They are frequently very focused on getting more, and in the process may work hard. But so do a lot of other people. In truth the one thing that characterizes them above all else is luck.

The older I get the more I realize how important luck is in life. Opportunities, connections, circumstances, etc. have to come together in just the right way out of random possibilities, but this is often forgotten. For example, CEOs believe they deserve to be in charge, never mind that any number of others could have risen to that position had things been slightly different. It too frequently follow with "star" status that there is a sense of entitlement, and a total loss of humility. Movie stars are no different. To be sure many are talented, but the aspiring actor pumping gas may be just as talented, but hasn't been at the right place at the right time. There are some exceptions, such as professional sports, but even there circumstances matter.

I bring this up because of the issue of taxation. I don't begrudge them their wealth, nor do I think there ought to be any kind of leveling to establish "fairness," as the left would have it. But I do object to their having undue governmental influence. Unfortunately politicians are in awe of the rich, even though there is less there than meets the eye. They can't legally contribute any more than anyone else, and their fundraising prowess is actually based upon leaning on others, i.e.suppliers, business associates, etc., becoming a fundraising "bundler." This gets them special access to elected officials, who are constantly raising money for re-election; access they don't deserve.

Low taxes on the rich is a position largely held by Republicans, who as a result are saddled with the impression of "favoring the rich." Yet a majority of the richest people in the US favored Obama in the last election, so it is not as though the Republicans owe them anything, and it is time for them to put an end to this stereotype. Given the disastrous amount of spending and debt we are facing, the very richest people can pay more, given how fortune has favored them.

This need not involve confiscatory tax rates, but rather ending all sorts of deductions and loopholes that are in the tax code. I would also add that certain contributions ought not to be deductible. For example, large donors, usually with large egos, frequently get facilities named after themselves. Why should plastering their name all over get them a tax deduction? If their egos are such that they need to see their name on things, let them fully pay for the privilege.

That said, the actual conservative position is not to intrinsically favor the rich because they are rich, but rather to maximize economic benefit for society as a whole. For the question is what is preferable- to have them control and spend their own money, or have the government do it. In seeking confiscatory taxes the left wants to control the money themselves through the government in order to "improve" society in areas they think are deficient. But government is ineffective and inefficient at just about anything it does. When it comes to their money, the rich, on the other hand can do only one of two things- either they invest it or they spend it.
If they invest it they precipitate economic growth, which benefits everyone. On the other hand, if they spend it, even on luxuries, they are still contributing to economic activity and creating jobs. For example, when someone wealthy buys a yacht they are creating and sustaining jobs for all the people involved in its production.

What they don't need are any favors from the government, and that is what must end. In addition, I believe the income tax should be graduated, but with a low ceiling, for the simple reason that money breeds more money. Someone wealthy has far more access to funding and loans than others do. This would not impact small business given a credit for investing in new enterprises. In fact the best thing that rich people could do for the economy is to behave like rich people, spending an investing, rather than trying to influence public policy. That especially includes annoying wealthy offspring who often feel compelled to engage in "public service" due to their fortunate circumstances, which inevitably involves public spending at the expense of everyone else.

Those who have created fortunes are far more obsessed with making money than other people. Americans tend to be indulgent of the wealthy because most of them want to become rich themselves. Personally, like the ancient Greeks, I think the pursuit of money and possessions at the expense of everything else in life is folly, for in the end you cannot take them with you and your ownership is nothing more than temporary. There are many more satisfying and appealing aspects to life and better ways of using one's time. But I suppose it is necessary for some people to keep the wheels of commerce turning to maintain economic prosperity for everyone else.

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