A post on Facebook got me shaking my head. How misinformed can some people be? It began with a reference to an article about the “super rich” followed by the following Bible verse:
“But those who desire to be rich fall into temptation, into a snare, into many senseless and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evils” (1 Tim. 6:9–10).
The CNN report on the super rich and their tax havens went like this:
The world’s super-rich had between $21 trillion and $32 trillion of wealth hidden in tax havens by the end of 2010, a new study says. The size of these unreported financial assets is equivalent to, or even larger than, the combined GDPs of the United States and Japan, representing up to $280 billion in lost tax revenues.
Here was my first comment:
Good for them. Keep as much money away from governments as you can. An individual’s attitude toward money is an issue between God and the person with the money. It’s not the business of government that some people might love money. Rich people shouldn’t be taxed to punish them.
It’s not just the wealthy who might love money. There are a lot of non-wealthy people who love money enough to run-up credit card debt, think about money all day law, steal money, and even cheat on their taxes. These same people have no problem supporting politicians who will enact laws that distribute other people’s money to them.
Another comment made this point: “a progressive tax is punishing the rich.” The original poster then came back with what I consider the fundamental flaw in so much economic thinking today:
True, but only if excessive, to say 50%. But if not excessive, then it’s not punishment. Either way, tax evasion remains illegal. I believe that the love of money is a key driver to tax evasion (and all kinds of other evils).
First, how is keeping money away from governments, whether legally or illegally, the “love of money”? If a government is corrupt, why would I want to give it more money, especially if my government is using my money in an unconstitutional way and for immoral wars?
Second, the assumption of the advocate of a so-called non-excessive progressive income tax is that politicians can’t be lovers of money and power.
Third, I asked, Who gets to define what’s “excessive”? That’s like asking a wolf in the midst of a flock of sheep, “What’s for lunch?” Governments don’t know the meaning of “excessive.” Governments can always find some new program that they believe should be funded by the rich. In an article written for the East Africa Journal in 1965, “Problems Facing Our Socialism,” Barack Obama’s father wrote, “Theoretically, there is nothing that can stop the government from taxing 100 per cent of income so long as the people get benefits from the government commensurate with their income which is taxed.”
If all that tax-haven money were unleashed — every penny of it — and taxed, it would come to $280 billion. At $3 billion per day, the tax revenue would 93 days, and we would be back at square one.
If you want the money out of tax havens, make it safe for people with money to keep more of their money. That way they’ll spend more and invest more with the result that more people will benefit without becoming dependent on the government.