Taxing the Rich More Is About Pain or Control, Not Revenue

So this week we learn that Obama “is launching a new p.r. campaign to rally popular support behind his push to raise tax rates on the rich.” This statement is hard to take seriously, because Obama has been trying to rally popular support behind his plan since 2007. Perhaps we can say that Obama is about to launch a “surge” in his campaign to get more income from the rich.

What is the motive for taxing “the rich” more? Obviously, taxing the rich more has nothing to do with reducing the deficit, let alone the debt. Simple math tells you that there is no way that would really make a meaningful difference.

Taxing the rich “more” has a populist appeal and a monopolist appeal.

Populist appeal: Many get pleasure from the belief that they can cause those who they perceive as “better off” to suffer more than they otherwise would.

No one likes to be deprived of their stuff. It hurts them. And that is reason enough for the idea of taking more stuff from the wealthy is going to appeal to massive number of voters. They want “those people” to hurt.

Of course, the end of the “Bush tax cuts” won’t be enough to satisfy that hatred and envy. Republicans need to directly address this issue to the American people. “Taxing them isn’t going to help and just wanting to hurt them isn’t right.” They can point out that the Administration could and should prosecute the real criminals among the “one percent”—such as Jon Corzine and his looting of customers at MF Global.

Monopolist appeal: The ultra rich will get short- and perhaps long-term economic opportunities from hampering small businesses and entrepreneurs.

As much as I hate Warren Buffett’s continual pleas to tax the rich more, I have to admit he did show a slightly better influence when he “said he supports Obama’s proposal to end the Bush tax cuts for the wealthy, but he’d prefer setting the point where taxes increase at $500,000 income, instead of the $250,000 the White House proposed. Buffett, as one who makes money from picking the right investments, probably has more interest in seeing new businesses take off and grow. But for most of the super wealthy, preventing competition and remaining forever on top without fearing the guy who drops out of college, doesn’t seek employment, and creates a new innovation. Raising taxes on such people, the person whose income is derived from a small business, is a way to reduce the number of such people. The damage will be amplified by the previous tax increase known as Obamacare that especially hits the same group making $250,000 a year. Again, Micosoft and many other “mega” companies will be much more likely to sustain the costs and also to find business opportunities as smaller firms fail under the burden.

It might be helpful for Republicans to point out that, for Warren Buffett to even call for increased taxes for the half-millionaires is worse than someone like me calling for tax increases on all those who make $15,000 a year. Buffett is attacking the wealth of those who are far more poor than he is.


I don’t know how much any of this is significant for the economy in comparison to the major collapse that is coming. But for the sake of basic ethics and basic principles of civilization, I will always resist hating and harming people for what they have. And I will never give my consent to a powerful government-corporation combine that wants to hurt anyone who might upset their place at the top.

That’s why the Obama tax hike must be resisted.