I’ll add another reason though to a certain extent, I agree with @TomJohnson1 - very few rich people are capable of thinking logically on this topic:
If we have a more equitable society, there will be a whole lot more consumers with more purchasing power. Now the caveat is that of course I want a more environmental system going forward - I’d like the consumer goods to be made responsibly, have a path to composting or recycling, and if they use energy, that they be energy efficient. But obviously entrepreneurs looking to make the next cool thing can succeed a lot more if there a bunch of people who could recognize it and buy it.
But as I’ve posted in other threads - the bottom line is that 70% is at a high enough level that there will be huge efforts to avoid paying tax at this level whatever it takes (by deferring income, plowing it into business expenses which can be a good thing, or cheating). Any estimate of increased revenue better take this into account.
In my opinion it would be better to fight for a 50% top bracket with a much simpler code which makes avoidance (except where legitimate like just not taking as high a salary and letting your business grow) much more difficult.
Michael Dell and the others are most concerned about taxation cutting in to the amount they have available to buy politicians in the US and abroad.
During the 70% taxation era the wealthy never ran short of dough to finance lavish lifestyles, the number of politicians they could buy WAS limited…enabling a thriving middle class during that era.
I welcome the revolution. The rich picked their side, we’ll pick ours. It was never going to be pretty.
As for the world their grandchildren will inherit, a hellhole is baked in for rich and poor alike.
And I’d definitely prefer a world led by China. US leadership has been a disaster.
I am an accountant and the argument that the tax code should be easier is political junk. One, tax preparation in the United States is a multi-billion dollar industry which will not be destroyed and two, keeping multiple taxes and a complex tax code makes it difficult to compare tax rates to other countries so our leaders can say that we pay less taxes than other countries which cannot be proven. I just pulled out my 1989 version of the Commerce Clearing House “U.S. Master Tax Guide” and it has 648 pages. The 2019 version has 1007 pages. Those politicians have sure made the Federal Tax Code simpler. By the way the 2018 version has 1008 pages. The new tax law made the Code 1 page shorter.
If the super rich cared about the rest of humanity they wouldn’t be the super rich. They are not going to start caring now because of Paul’s article that they won’t read.
CD is full of articles like this: the 1% should do this, the rich should do that. All progressive drivel. Really, it’s a cottage industry…
First of all, politicians should be barred from excepting money from anyone. We already have had politicians with a freezer full of illegal cash.
Just think of the rise in productivity if employees were to get REAL profit sharing.
You are right in that the super rich won’t volunteer to pay more in taxes, but careful with saying they shouldn’t exist, that may not be feasible “from first principles”. Look at my comment below.
Why are there super-rich? Sounds like a silly question, but it is a profound one.
It is in the nature of both innovation and the psychological nature of humans that as technology develops, extreme inequality will tend to emerge. It is also in the nature of the knowledge economy to generate extreme stratification of earnings. From the combination of both these aspects there results a very skewed wealth distribution.
Do you want to get rid of the super rich? If so, it appears you have to throttle innovation and you must decrease the value of knowledge in the economy. Sorry, there doesn’t seem to be an alternative that will give you Tesla cars and I Phones without Elon Musks and Steve Jobs(es).
I also would prefer a world led by China. I dedicated a few years of my life to learning Chinese in anticipation of China’s hegemony, but I am afraid by the time that happens I’ll be long gone.
We don’t need I-phones or Tesla cars. In addition, if Elon Musk drops dead, there are plenty of Elon Musks waiting in the wings to take over, including better ones, surely.
Do you think computers wouldn’t have been programmed had there not been a Bill Gates?
Willy, with no intention to start an argument, please make the distinction between “innovators” and “professional managers”.
If Munk drops dead, there are plenty of managers who can take his place “after” he started his factories. If Munk had dropped dead when he was a student at Stanford, there would “not” have been plenty of people to take his place. Same for Steve Jobs, Gordon Moore, etc. etc.
Geniuses like Mozart, Jobs, Bach or Munk are “unique” human beings, you can’t replace them. If they weren’t around, you would have garbage nauseating “music” like Eminem’s and crappy useless technology like the Yugo.
“And I’d definitely prefer a world led by China. US leadership has been a disaster.”
Problem is that it doesn’t seem to matter which country carries the mantle of world leader, they all tend to want to run things for their own benefit at the expense of the rest of the world, and we’ve been just as guilty of that as anyone else. I don’t see China being the exception…probably an instinctual thing related to survival instincts.
A surprising, thought provoking article. The reasons for the super rich to fear the current trend of wealth concentration are many and varied. But the most compelling fear is that it is unsustainable.
Sir, you raise valid points in general.
I too believe that societal stratification maximizes value creation, and hence that a kind of phase separation in classes evolves spontaneously - iow a classless society is an unstable condition.
Our prosperity really is dependent on complementary societal classes, I concur with you.
However, if climate change is as threatening as it is portrayed to be, we’d better stuck to the Neanderthal way of life, hadn’t we?
If the objective is survival, then the optimal path was probably never to have evolved a large brain - sharks and cockroaches would think so.