Liberals view income disparity as social injustice, proposing to remedy the income gap by taxing higher income people and giving the money to lower income people. The premise for such action is that rich people have more money than they need and poor people are entitled to that surplus.
The state of Maryland has the nation’s highest median family income of $69,202. It is nearly twice the state of Mississippi’s median family income of $36,646. Using the logic of the redistributionists, that income gap is unfair and unjust and the only way to lift Mississippi out of poverty is to tax the Terps.
Now, I’m sure that once the Terp Tax is enacted those Marylanders will work a lot harder knowing that the money they no longer keep for themselves will go to someone who needs it, don’t you? And Mississippians will work harder too, just to show their appreciation to those Terps who leveled their playing field, don’t you think?
Not to mention that famous 1.6 Keynesian multiplier that kicks in anytime you take money away from one person and give it to someone else. No, no – it really works. I took a dollar from my wife’s purse and told the guy at the Kwik Trip it was worth a buck sixty. The only thing was, I couldn’t prove it was her dollar, so next time I have to get it notarized by a mental health professional, he said. That’s cool; I didn’t know I had to do that.
Yes, taxing the Terps would solve everything. You don’t suppose anyone would move out of Maryland once the Terp Tax kicks in, do you? If we equilibrate all the states, then the Terp gets to write a check for $18,991 while his cousin right across the border in West Virginia deposits a $12,786 transfer payment. Can’t imagine that would cause any family stress, would it?
Well, you see where this all is going. If you think taking the wealth of one state to give to another by force is a dumb idea, you are right. It does not get any smarter if it is county to county, city to city, or house to house. Taxing the rich, whoever that even means nowadays, will not make the poor richer. It will only incent the rich to avoid, evade, move, or to simply quit producing.
And subsidizing the poor does not change the factors that caused their poverty – it would be nice if it were that simple. The people of Mississippi are not poor because the people of Maryland are rich.
The only people who prosper when forced wealth transfers occur are the people doing the transferring. It is no accident that the top two ranks in median income are now locked down by the company town of Washington, D.C. and its suburb-state, Maryland. The redistribution industry – the U.S. Government – is thriving.
Karl Marx described the essence of his socialist philosophy, “From each according to his abilities, to each according to his needs.” Can you think of a more concise description of our nation’s tax and welfare framework? Can you find justification for either progressive taxation or entitlement transfer payments in our Constitution?
In the months to come, Republicans and Democrats will once again posture and preen over tax policy, and journalists will read partisan sound bites with no earthly clue what they mean and call it news. Pick your victim and villain – billionaires and paupers will work fine in either role – and you will have no problem finding “proof” on the internet that some other guy is not pulling his weight. About all you will really prove is that data is not information.
Over the past decade, our government has nearly doubled while our median income has remained flat. The former explains the latter; in fact, there is not a lot more we need to know to judge the wisdom of the Keynesian prescriptions that President Obama and Chairman Bernanke continue to promise will restore our prosperity. They haven’t and they won’t because they are wrong.
Our prosperity will only be restored when we produce more. Our median income will rise when our work adds more value. We earn more when we are worth more, not the other way around. You will make more if you can weld a pressure vessel than if you can weld a bike frame; more still if you can weld a leaking gas pipeline; even more if you can weld it underwater.
And taking more money from the folks who own the underwater welding firm will not increase their welders’ incomes. Giving it to Pakistan will not trigger some fictitious magic multiplier effect here in this country. Printing fiat money at the Fed that is given to Goldman Sachs to lend to the U.S. Treasury who bails out Citibank so they can pay billionaires’ bonuses that are taxed to fund government is not the way to fund government, even if Krugman says so.
Our real billionaires – Buffet, Gates, Zuckerman, Whitman, Jobs, Turner – did not start out that way; and Government did not select them. We bought their products; they are rich because we decided to make them so. I gave Steve Jobs a few hundred dollars for an iPad; if I wanted that money to go to ACORN, I would have given it to them myself. I don’t need President Obama to do it for me; more importantly I don’t want President Obama to do it for me.
Why not take the billionaires money? For the same reason we should not take it from all the Terps of Maryland - because it is their money. There is a commandment against such things. We should not kill them, either, or commit adultery with them, or covet their house, or covet their things, or bear false witness against them, or worship them.
We should buy their stuff, or not, as we see fit. Billionaires, like Terps, are our fellow Americans, not some cows to be milked.
“Moment Of Clarity” is a weekly commentary by Libertarian writer and speaker Tim Nerenz, Ph.D. Visit Tim’s website www.timnerenz.com to find your moment.