A chap called John Russo, whose comments I follow on LinkedIn, takes aim at the recent pattern of well-off people joining “Patriotic Millionaire” calls for folk like them to be taxed a lot more. An obvious retort is that all they need to do is set up a direct debit with the relevant revenue body, and job done. Oddly, I rarely see such “Patriotic” rich folk saying “yes, of course, I will get that done immediately”. And I suspect a reason is that they want to sound good, and also like the idea of people being coerced. The coerced transfer in the name of “fairness” is the point. Voluntarily giving some of your money to the State is a bit, well, too voluntary.
Anyway, some paragraphs from Mr Russo:
I realised there’s a special kind of hypocrisy in preaching equality from the elevated comfort of elite media, elite networks, and elite platforms.
The idea of a wealth tax has been around for decades, but suddenly it’s being sold as the grand answer to Britain’s economic and social problems.
That’s the pitch. Simple. Catchy. Morally flattering. And, if you don’t look too closely, it’s vaguely heroic.
But the truth is less glamorous. A wealth tax isn’t a bold reform. It’s often a slogan in search of a serious policy, and a performance of fairness that doesn’t come close to fixing the machinery underneath.
Yes, Britain has inequality. Yes, too many people feel shut out while a narrow group sits on significant assets. But that does not make every proposal for taxing wealth a useful one. Britain isn’t America. We don’t have California-scale concentrations of extreme wealth, and we don’t have an economic structure that can pretend a wealth tax is some great fiscal breakthrough.
The sums being talked about sound large until you place them next to the scale of the state. Then they look less like transformation and more like loose change with a manifesto attached.
The hypocrisy is that some of the loudest advocates of wealth taxes talk as though they are speaking for the squeezed and the overlooked. In reality, they are often highly visible, highly connected, and very comfortable participants in the same media and political ecosystem they claim to be challenging. They denounce concentrated power while depending on the attention economy, elite networks and moral theatre to amplify their own status. It’s a neat trick. Condemn privilege from within a system that rewards you for sounding rebellious.
I note that the tax pundit Dan Neidle, who is fairly left wing but very much against wealth taxes, has said,
He then posts thirteen leading questions from the poll and says he is disappointed in Survation, and goes on to say,
Emphasis added.
And as you say, it’s always open for these soi-disant patriotic millionaires to donate to the government. They don’t have to wait for other people to do it. Milton Friedman was not the only one to point out that if they think the state needs this money to do good, the need is all the greater now when the state isn’t getting any money from the other millionaires.
California has the highest taxes on the wealthy of any of the 50 States – most of State tax revenue in California comes from the wealthy, yet it has the worst poverty, adjusted for the cost of living, of any State. Yes you are, now, better off living in Mississippi than in California – and the government schools are better in Mississippi than in California. “But that is not the impression we get from Hollywood films and television shows” – sadly Hollywood lies, lies about just about everything.
As for the “patriotic millionaires” – they were being praised on the front page of the Communist “Morning Star” today.
The Communists love leftist millionaires and billionaires – they would still force-feed them their own children, but they love them – because the “Woke” rich are so USEFUL to the cause (“useful idiots”).
Gary “Malvinas” Lineker is a typical example – he went to court to avoid paying millions of Pounds in tax, but claims to want higher taxes.
Every fashionable cause from kill-the-Jews to tax-the-rich sees Mr Lineker jump aboard the bandwagon – so why should anyone care what his Communist “friends” do to him (and people like him) if they take full power?
As for the cause of some (some) of the extreme inequality – Credit Money is the cause, the Cantillon Effect (named after the Irish economist Richard Cantillon – who was active some three centuries ago). It is not an accident that major financial services cities (such as New York) see the most extreme inequality – of-course-they-do.
Yet the people who claim to care about extreme inequality never denounce Credit Money, they never demand a return to commodity money. And they never demand a return to honest money lending – i.e. the lending of Real Savings, the actual sacrifice of consumption, rather than Credit Bubble blowing.
How about HMRC starts a web site called “Hall of Heroes” where, when you make a donation to the tax system beyond what you are required to do that they (optionally) publish your name and the amount of the donation. That way you could REALLY show what a good person you are. Heck maybe even apply social pressure to rich people to do the same?
Of course the real problem is that rich people aren’t nearly rich enough to help out the “put drunken sailors to shame” government. I don’t know the numbers in the UK but here in the USA the top 1000 richest people (which includes all the billionaires) have a net worth currently priced at about $9 trillion (though probably lower today given the beating the tech stock market has taken past couple of days.) So 5% of that is about half a billion dollars, or about 20% of the deficit. In the best of circumstances the best that tax could do is slightly reduce the amount extra we borrow. But of course that isn’t what would happen at all:
1. That is their value at current prices, but if all these rich founders started selling stock to pay the tax bill the stock prices would all crash.
2. Of course attached to this is all the promises, including Berine’s mathematically impossible $12,000 check to everyone. So the tax would not come close to offsetting that, and so borrowing would INCREASE not decrease.
3. And of course as these companies had equity sucked out of them they’d have to reduce operating costs, meaning massive waves of unemployment both making everyone worse off, and dramatically reducing the tax base from which the government gets their revenue.
4. Billionaires are mobile so they can move, and they have hundreds of the very best tax lawyers working for them, so they can tell the government to fuck off.
So do this and you’ll get one quick small hit then devastation of society. Of course it is unlikely to happen at the federal level any time soon, but VERY likely in California (where they have promised it will be a ONE TIME tax! Because we ALL believe them when they say that right?) So hopefully California will show just how devastating it will be and maybe it’ll hold off the feds.
But it is also worth saying that the tech revolution we are going though will generate such huge amounts of value that who knows how it will all pan out. FWIW, I think in the next twenty years the US with have centralized healthcare payer of some kind and a UBI. Not that I am a fan of either, but I think both are almost inevitable.
Gary Lineker is a flaming hypocrite. That leering grin. I never warmed to him.
Johnathan Pearce – yes indeed.
Fraser Orr – one thing to watch is, if the Wealth Tax in California is passed, will it be allowed to be retrospective – which it is in the writing of the proposal – it says people resident in California not at the time the measure is passed, but some time ago.
The Californian courts are corrupt – they will pass it, but will the United States Supreme Court?
With hindsight it is clear that California was doomed when the ideologically corrupt judges overruled the vote by the taxpayers to limit government benefits and public services to illegal immigrants – when that was overruled (by the corrupt judges), illegal immigration to California (naturally enough) exploded – and the Democrats make sure the illegal immigrants illegally vote, or, rather, they vote in the name of the illegal immigrants who they they have, illegally, put on the voter rolls.
So many taxpayers have left California that it is not really necessary for the Democrats to rig elections – but they do anyway, it is a principle for them.
Will the Wealth Tax be a bridge too far even for the masters of California?
Perhaps it will be – after all if California totally collapses before 2028 it would be embarrassing for the Democrats going into the Presidential election.
After 2028 they do not care – people in California could eat each other (not so much “eat the rich” as “eat everyone – or be eaten”) and the Dems would not care.
If you are rich and want to use some of your surplus cash to help people whom you perceive to be less fortunate, I can’t think of achieving your aims than giving it to the state. Using the money directly to help people is a far better idea.
@Stonyground
I can’t think of achieving your aims than giving it to the state. Using the money directly to help people is a far better idea.
I mean hell yeah. When USAID was sort of shut down I heard constantly from people about how America was killing babies dying of AIDS. My response was always “so how much did you increase your giving to African AIDS charities to compensate?” I’ve yet to find someone who increased it by one dollar.
I just returned to this and see that I’ve garbled my message somewhat, although I suppose that you can sort of see what I was trying to say.
I can’t think of a worse way of achieving your aims than giving it to the state.
Is what I meant to say.
It was Tim Worstall who started the tradition of pointing out that one could always make voluntary donations to HM Treasurer. Or so he claims.
“How about HMRC starts a web site called “Hall of Heroes” where, when you make a donation to the tax system beyond what you are required to do that they (optionally) publish your name and the amount of the donation. That way you could REALLY show what a good person you are. Heck maybe even apply social pressure to rich people to do the same?”
I have said for years that Right wing governments the world over are missing an open goal in not creating a voluntary tax system to run alongside the involuntary one. One that is identical to the normal tax system, but with higher rates across the board. That anyone who so chooses can sign up to for a fixed period of (say) 3 years, or perhaps until the next election, whenever that might be. And then publish the names of all those who do. This would put all the big mouth Left in the position of having to declare by their actions rather than their words whether they really wanted higher taxes or not.
My guess is it a very small amount of people would sign up, and the amount raised would be vanishingly small. Because socialists don’t want to pay more tax, they want someone else to do that.
Sorry to rain on your parade but 5% of $9tr is not half a billion, it’s half a TRILLION.
But everything else is correct. Trying to raise that much would indeed cause a crash in those individuals’ companies.
I can’t help wondering if that’s actually the intended effect though.