Tag: redistribution

Ultra-Rich Leftists Want to Atone for their Guilt by Paying Higher Taxes…And They Want to Impose their Neurotic Views on the Rest of Us

A Washington Post columnist reports on a group of limousine liberals who are lobbying to pay more taxes. Of course, there’s no law that prevents them from writing big checks to the government and voluntarily paying more, so what they’re really lobbying for is higher taxes on the vast majority of investors and entrepreneurs who don’t want more of their income confiscated by the clowns in Washington and squandered on corrupt and inefficient programs:

A group of liberals got together Tuesday and proved that they, too, can have a tax rebellion. But theirs is a little bit different: They want to pay more taxes. “I’m in favor of higher taxes on people like me,” declared Eric Schoenberg, who is sitting on an investment banking fortune. He complained about “my absurdly low tax rates.” “We’re calling on other wealthy taxpayers to join us,” said paper-mill heir Mike Lapham, “to send the message to Congress and President Obama that it’s time to roll back the tax cuts on upper-income taxpayers.” …They are among 50 families with net assets of more than $1 million to take a “tax fairness” pledge – donating the amount they saved from Bush tax cuts to organizations fighting for the repeal of the Bush tax cuts. According to a study by Spectrem Group, 7.8 million households in the United States have assets of more than $1 million – so that leaves 7,799,950 millionaire households yet to take the pledge. …Of course, if millionaires really want to pay higher taxes, there’s nothing stopping them. The Treasury Department Web site even accepts contributions by credit card to pay the public debt. …His donation will, however, ease the sense of guilt that comes with great wealth, described poignantly by the millionaires: “In 1865, my great-great-grandfather Samuel Pruyn founded a paper mill on the banks of the Hudson River in Glens Falls, New York,” Lapham explained. Judy Pigott, an industrial heiress on the call, added her wish that her income, “mostly unearned income, be taxed at a rate that returns to the common good that I have received by a privilege.” Confessed Hollender, who now runs the Seventh Generation natural products company: “I grew up in Manhattan on Park Avenue in a 10-room apartment.”

P.S. It’s also rather revealing that Massachusetts had (and maybe still has) a portion of the state tax form allowing people to pay extra tax, yet very rich statists like John Kerry decided not to pay that tax while urging higher taxes for mere peasants like you and me.

P.P.S. I debated one of these guilt-ridden, silver-spoon, trust-fund rich people on CNN last year and never got an answer when I asked him why he wanted to pull up the ladder of opportunity for the rest of us who would like to become rich some day

German Masochists

A handful of guilt-ridden wealthy Germans are asking to pay more tax according to a BBC report. They could just give their money to the state, of course, but they want to impose their self-loathing policies on all successful Germans. The amusing part of the story is that these dilettantes were puzzled that so few people showed up to their protest. Maybe next time they could do some real redistribution and announce that they will be tossing real banknotes in the air:

A group of rich Germans has launched a petition calling for the government to make wealthy people pay higher taxes. The group say they have more money than they need, and the extra revenue could fund economic and social programmes…

Simply donating money to deal with the problems is not enough, they want a change in the whole approach.

…The man behind the petition, Dieter Lehmkuhl, told Berlin’s Tagesspiegel that there were 2.2 million people in Germany with a fortune of more than 500,000 euros. If they all paid the tax for two years, Germany could raise 100bn euros to fund ecological programmes, education and social projects, said the retired doctor and heir to a brewery. Signatory Peter Vollmer told AFP news agency he was supporting the proposal because he had inherited “a lot of money I do not need”. He said the tax would be “a viable and socially acceptable way out of the flagrant budget crisis”. The group held a demonstration in Berlin on Wednesday to draw attention to their plans, throwing fake banknotes into the air. Mr Vollmer said it was “really strange that so few people came”.

But not all tormented rich people live in Germany. A few months ago, I had a chance to debate an American version of this strange subspecies.

Emergency Aid to Seniors? No Way

Social Security benefits are indexed for inflation, but because inflation has been roughly zero for the past year, the adjustment formula implies no increase in benefits this year. Nevertheless,

President Obama on Wednesday attempted to preempt the announcement that Social Security recipients will not get an increase in their benefit checks for the first time in three decades, encouraging Congress to provide a one-time payment of $250 to help seniors and disabled Americans weather the recession.

Obama endorsed the idea, which is expected to cost at least $13 billion, as the administration gropes for ways to sustain an apparent economic rebound without the kind of massive spending package that critics could label a second stimulus act.

This is outrageous on four levels:

1. If the president thinks the economy needs more stimulus, he should say that explicitly and have an honest debate.

2. This is the wrong kind of stimulus. Any further stimulus should consist of reductions in marginal tax rates, such as a cut in the corporate income tax (or better yet, repeal).

3. All Social Security recipients already have a moderate guaranteed income, and many have significant income beyond their Social Security benefits. This kind of transfer has no plausible justification as redistribution for the needy.

4. Sending checks to seniors is a blatant attempt to buy their support for Obamacare, which promises to cut Medicare spending substantially.

C/P Libertarianism, from A to Z

Don’t Leave Room for Desert

Duncan “Atrios” Black sums up and amplifies on a much longer post by Salon’s Glenn Greenwald as follows:

Just adding on to Glenn’s post, much opposition to the government actually doing anything decent for people comes from the idea that the government is going to take my tax money and give it to people who don’t deserve it. The problem is that for decades the Dems have tried to get around this by making sure policies and programs were relatively small and incremental, everything targeted and means tested. But doing that effectively confirmed the critics’ point. The big (giant) government programs which are most popular are the ones which are universal - Social Security and Medicare - and other less controversial government programs, like highway spending, are also perceived to benefit people across the board.

There’s a couple of interesting things going on here that seem worth unpacking.  The first is actually a legitimate point about how valid arguments against various kinds of redistribution tend, with unsettling ease, to shade into unsavory demonization of the folks on the receiving end of the transfer. Suppose someone suggests that the government should, either by regulation or direct subsidy, ensure that the indigent are provided with health care or that insolvent homeowners are protected from foreclosure. Now, there are a few types of objections people might raise. There’s an argument from efficiency and incentives: To the extent that the risks associated with individual financial or lifestyle choices are borne by the public, there’s a familiar problem of “moral hazard” reducing incentives for prudence. And there’s an argument from property and autonomy, to the effect that even if people ought to help others in need, each person is entitled to decide whether and how to do so without compulsion. Neither of these implies any blanket judgment about the folks who find themselves in need of aid. The first argument does suggest that redistributive policy will make it rational for people to take more risks at the margin, but it does not follow from either that people who are having trouble meeting their mortgage payments, or people who get sick and cannot afford care, are bad or foolish or irresponsible or otherwise deserving of their fate. And it is a good thing for these arguments that no such conclusion follows, because it’s clearly not true.

Yet in popular political rhetoric, it’s disturbingly easy to find just such a leap being made. Think of Rick Santelli’s jeremiad against “losers” under foreclosure getting bailed out by government. Is it just that people are inherently spiteful or unkind? In fact, the tendency to assume that people who are badly off must deserve it may be a result of what social psychologists call the Just World Hypothesis. In brief, faced with evidence that the world is often arbitrary and unfair, and that bad things often happen to good people, many of us prefer to preserve our faith in a basically fair and benevolent universe by assuming that the badly off must somehow deserve their fates—which is a stronger and (I think) rather morally uglier proposition than the more plausible notion that people are often significantly responsible for their fates.

There are at least three reasons to take some care to avoid this implication, given how easily human beings fall into it. The first is just that it’s an ugly and callous attitude to have toward people who will often deserve our compassion whether or not they ought to receive government aid. The second is that people will readily—and sometimes intentionally—misconstrue an argument about incentives as an argument about the moral worthiness or personal virtue of the proposed recipients, which does not make for a particularly fruitful conversation. Finally, there’s a paradoxically quite authoritarian implicit premise lurking behind this sort of argument—to wit, that it’s the job of the government  to determine who is or is not morally deserving of its largess, and that the central question is whether this or that particular class of prospective recipients qualifies. That’s a frame people across the spectrum ought to be uncomfortable with.

As Atrios points out, strategic response to this on the part of progressives has been to embed what are essentially welfare programs within an elaborate—and functionally, if not politically, superfluous—superstructure of universal social insurance. My colleague Will Wilkinson has pressed this point cogently in the context of Social Security. The rationale for the program is ultimately that we hope it will prevent people from being mired in poverty in old age. There is no sane reason, on this rationale, for cutting Bill Gates a check when he reaches the age of eligibility—but we do it this way because progressives believe, perhaps correctly, that a means-tested aid program for the indigent elderly would be more politically vulnerable to cuts. Which, I think, underscores the perverse effect of thinking in terms of the desert of the recipients, since there’s no actually-valid argument on which a universal need-blind benefit makes more sense than a narrow means-tested one. So one more reason to eschew desert-centered political discourse: It gives rise to policy that’s less intelligent whether your underlying commitments are progressive or libertarian.