the Top 1% Alone
by Anthony Gregory: What
About the 'Real' Left?
a $1.6 trillion federal deficit and record spending, the liberal
pundits spout their nonsensical claim that all would be swell if
only the top 1% were taxed a bit more.
How does anyone
believe it? The idea is preposterous just in sheer mathematical
terms. According to Mother Jones, the top 1% of families
made on average $1.138 million in 2008. Wikipedia says there are
1.132 million households in this group. Multiply these numbers and
we see this hated class makes about $1.3 trillion annually. These
are rough calculations but they suggest that even seizing all the
income of the top 1% wouldn’t cover the U.S. deficit to say nothing
of the rest of the budget. This ignores the fact that they already
of federal income tax revenue. Soaking them for another few
percent per year, or even vastly more, isn’t going to move the government
noticeably closer to fiscal solvency, putting aside the resulting
destruction to economic growth.
The only way
to fix the deficits with tax increases is to terrorize the middle
class, unleash the IRS to bloom into its full Nazi potential, and
raise rates to the skies. Even this might not work. Since the Korean
War, despite all changes in the tax rate and code, the federal government
has leveled out
at collecting just around 20% of GDP. The federal budget is nearly
27% of GDP today. The deficit is a spending problem unfixable through
more confiscation, barring skyrocketing inflation or a taxing regime
of totalitarian character.
We are told
the rich sit on the lion’s share of the nation’s assets and financial
wealth, and so not only their income is at issue. But let us not
ignore the assets controlled by the federal government. Uncle Sam
owns tens of thousands of buildings, 30% of the nation’s land, many
trillions of dollars in assets altogether. Why not hack away at
this gross inequity before feeding the monster state more money?
Are the rich supposed to be fleeced of their wealth so it can be
thrown down Washington’s money hole? The government loses trillions
in its Pentagon budgets, not accounting for where the money even
goes, and yet we’re supposed to encourage the ravaging with higher
Tax cuts do
not always shrink government. The Republicans and Democrats are
pleased to engage in wild deficit spending. The federal government
borrows more every year. Tax cuts in the face of high spending are
arguably fiscally irresponsible, pushing the burden onto others
rather than really dealing with the problem.
On the other
hand, it appears that the U.S. government is going to default on
its debt obligations, sooner or later. There is simply no way to
reverse course. Or at least there’s no way to do so with the support
of more than three or four odd members of the political class. The
U.S. is heading toward national bankruptcy and today’s pitiful proposals
to shave a few tens of billions off expected increases in entitlement
spending will obviously mean nothing.
the responsible thing is to cut taxes on the rich as well as everyone
else. Even if the deficits widen, it will only hasten the realization
of the U.S. government’s insolvency and the refusal of people worldwide
to lend it more money. This is, overall, a good thing. The American
state does little but destroy the peaceful social order and lay
waste to foreign peoples. Those who lend it money have no moral
claim to get it back, any more than a man who lends a gun to a mob
boss, knowing what it will be used for, has a moral claim to have
his firearm returned.
be cut, but even in the midst of high deficits, let us remember
that the top 1%, like everyone else, are paying way too much. Two-thirds
of Americans recognize they’re overtaxed. Liberals say Americans
pay too little in taxes. Nominal rates have been higher in the past,
but revenues are still as high as they’ve been in generations. It’s
time to try something different: actually reducing the state’s bite
out of the private sector.
the rich have more of their money and the government have less.
Most of the affluent contribute immeasurably to the wealth of society.
They have more but generally produce more. And what about the scarcest
of resources – time? Americans have more leisure time than in past
generations, thanks to the market’s immense wealth creation. Most
of this benefit has accrued to the poor, while very little has
gone to the richest 10%. Most rich people work long hours, every
day, merely to sustain their wealth-generating enterprises, which
benefit us all.
Some will counter
that most of the super-rich (which is what the top 1% is often misleadingly
described as) do not deserve all they have because the government
provides them with a litany of special privileges.
Fine. Do away
with the privileges too. End corporate welfare. Stop the bailouts
and farm subsidies, the vast bulk of which ends up in the hands
of fabulously wealthy corporate farmers. Scrap the licensing and
regulations that big business uses to clobber competition. Abolish
the Federal Reserve. Terminate the entire military-industrial complex.
Halt the "green energy" programs that amount to federal
support for favored corporations. Stop the enforcement of patents,
which skews the economy toward established industry. Separate the
government from the economy as much as humanly possible. Let the
moral hazard, welfare for the rich, socialism for the well-connected
fall by the wayside.
never propose such things, not very seriously, and elected Democrats
virtually never do. They all love the fascism of America’s mixed
economy. So do most of the super-duper rich, who suspiciously call
for higher taxes all the time, but not for reducing federal intrusion
into the market. Cut their taxes. End their subsidies. Sever the
ties. Stop the codependency. So long as the super rich are paying
taxes, they’ll have reasons to devote their time to manipulating
the corporate state. Across the board tax cuts on the rich are part
of the anti-fascist cause.
Even most of
the crony capitalists who constitute a slim minority of the top
1% are angels compared to the government itself. Whatever harm they
do is aided by the state, but they tend to do a lot of good. They’d
probably do even more good in a freer market. Regardless, the government
has the least claim of all to anyone’s income, as it, unlike the
private sector, is incapable of producing wealth as a matter of
course. Also, it uses a big chunk of every dollar it seizes to murder
and cage innocent people, something of which almost no one in the
top 1% is guilty.
As for the
poor, cut their taxes too. The left loves to target the top 1% and
the right loves to say, crazily, that the bottom 50% pays no taxes.
This too is hogwash. For most Americans, payroll taxes are a bigger
burden than income taxes. These should be eliminated entirely, for
moral reasons and for the sake of honest accounting. They do not
go into a retirement fund or insurance program, as the left insists
and the right implies by omitting the Social Security and Medicare
tax from their analysis of who supposedly pays all the taxes. If
these welfare programs continue, best to finance them from the general
fund and come clean toward younger workers that they’ll have to
save for their own future. Cut everyone’s taxes. Cut all the spending.
There is never a defensible reason to increase either.
If we think
there is unfairness in wealth distribution, let’s smash the statist
programs that have hatched over the years, coinciding with these
trends of inequality the left laments. But taxation should be cut
always and everywhere, no matter whom it targets. Taxation is the
violent confiscation of wealth conducted by the most regressive
of all institutions: the state. It destroys wealth and empowers
the true ruling class. All taxes, including on the rich, should
be slashed as much as possible.
heads and journalists talk about the "top 1%," watch out.
They are performing a bait and switch. They are conflating families
that make a couple hundred thousand a year, already paying close
to half in taxes, with people making billions, most of whom do so
with the help of the very government these pundits wish to expand.
But even pampered
billionaires are pikers and paupers compared to Obama, whose military
fleets and grand executive departments make him an effective trillionaire
in terms of the resources he commands. Unlike almost everyone in
the top 1%, he didn’t earn a dollar of what he controls.
problems can’t be fixed even by soaking the rich. But even if they
could, given the alternative, the only ethical and economically
sound approach is to cut taxes, never to raise them.
Gregory [send him mail]
is research editor at the Independent
lives in Oakland, California. See his
webpage for more articles and personal information.
© 2011 by LewRockwell.com. Permission to reprint in whole or in
part is gladly granted, provided full credit is given.
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