TAXING THE RICH

There’s been a lot of hype about how the richest 1% own so and so percentage of the world’s wealth. It’s been portrayed as if it’s a crime to earn too much, something that must be fixed.

All problems relating to poverty are blamed upon the greed of these billionaires. Greed is portrayed as a negative thing, but is it really so?

Greed is merely ambition, the striving to attain more. Is it evil to want more, even if you’re willing to put in honest effort for it? The problem which arises is that most people associate greed, and often incorrectly so, with a desire to earn more through any means possible. This is not the case.

According to humanist psychologists such as Carl Rogers and Abraham Maslow, humans have a desire to strive and unfold their inner potential. This will involve achieving the most you can, and to consider a craving for increment, for improvement a negative thing is quite absurd.

There’s nothing wrong if another person earns a lot more than you do. They produce things that are of value and are paid for it. It’s as simple as that. Income equality shouldn’t be a sort of ideal goal. A desirable goal would be to ensure that nobody is poor, as opposed to ensuring nobody is poorer.

In a capitalist economy, everyone is paid according to the value of the good or service they contribute to the economy. If there is a huge surplus of labor available in the market, then the value of labor will fall down. Similarly, if there’s a deficit, the value of labor will increase. The value of something in an economy is not determined by the work put in to achieve it, and this is something with which I’ve observed people having an issue.

You could work for a year at McDonald’s and will earn less than what a famous singer would make in a single night. The value of what you provide is determined by the demand of what you’re contributing. There are two aspects involved in being rich. Work hard, and work smart. If you’re doing a job that’s contributing nothing new to the market, then you won’t be paid a lot. The more irreplaceable you are, the higher you tend to earn. That is why CEOs earn more than the workers do, and why CEOs can easily increase their own salaries without a problem. It’s because they are necessary for the growth of the enterprise. In this sense, capitalism compels one to be different, to provide something unique.

Often I’ve encountered arguments about why the rich should be paying more taxes. These arguments tend to centre on the reasoning that since the rich have a lot of money they won’t be adversely affected by paying a bit more in taxes. This seems to be a repulsive and lazy solution. Can’t earn more? Tax those who do.

Currently, in Unites States, the rich (earning $250,000 and above) paid 55% of the net income tax burden, although their share of adjusted gross income (AGI) was only 28%. And many still believe that the rich aren’t paying their “fair” share.

I argue against taxing the rich from two standpoints: the moral one and the objective one.

From the moral standpoint, it is a most repelling notion that simply because a person has more, s/he should pay more. The percentage one pays in taxes should be the same. For every dollar you earn, the number of cents you pay to taxes should be the same for everyone. There should be a minimum level of earning after which your income can be taxed, to ensure that the extremely poor are a bit easier off, but after that the tax rate must be the same for all.

The argument that the rich can afford to pay more is redundant. Simply because you can afford to pay more doesn’t mean you have to. Taxing is not a polite email request for money. It’s pointing a gun at your head and saying that if you don’t hand over the cash, you’re going to be thrown into a cell. And simply put, you have no right to that money.

As long as you’re charging the same amount from everyone, it’s fair. They’re all giving the same portion of their income. But when you tax the rich more, it’s simply bullying. It’s the large portion of people who contribute things barely of value ganging up on those who do provide things of value, and asking them to cough up more money.

People talk all the time about how if we tax the rich enough, we’ll be able to pay for all healthcare and free education and everything else. Here’s the deal. In the United States, the blacks, who comprise about 12% of the population, are responsible for about 52% of the homicides. Killing all blacks would cut down homicides by 52%, but that’s a morally hideous solution, so no one will waste time discussing it. A milder form of the same logic applies to taxing the rich. Despite whatever it might pay for, it is not acceptable to tax them more. I could say, hey, if all the poor people rob everyone, they won’t remain poor. I’m not very certain that the government would be eager to pass a bill decriminalizing robbery for poor income families so that they can improve their lifestyle. Rather than making education and healthcare free, encourage the people to work hard, work smart and be able to afford to pay for these things themselves.

From the objective standpoint, taxing the rich more is contradictory to the goals of a country. A country would aim at providing employment for all, and the largest job creators are the rich. They are the ones who create and expand businesses, and these businesses hire people. The more you tax them, the less they expand their businesses and the employment reduces.

It’ll discourage investors from investing in the economy, which would further kill possible job opportunities. High tax rates also mean increase in tax evasion. In fact, one of the first things that happened in my country after we opened up our markets to the world was cutting down of the tax rates to decrease tax evasion.

Unlike what most presume, rich are highly unlikely to be lazy people, and being rich isn’t impossible. In fact, Bill Gates, Eminem, Dwayne ‘The Rock’ Johnson, Eminem, Shah Rukh Khan and a huge number of other rich celebrities started from poor backgrounds and went on to be extremely rich and famous.

I personally am not rich. I’m a teenager in a middle class family in a developing country. But I do plan to be rich one day, and even if I’m not, I still stand by the views I expressed in this article, until someone presents reasonable arguments to persuade me otherwise.

 

 

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12 Comments Add yours

  1. Fundamentally agree with this! Definitely agree that equality of outcome is not something to strive for- it is better to try and make people less poor than to try and put everyone on the same level. Especially since equality of outcome as opposed to equality of opportunity *does not* have the desired effects (such as with communism). I like your analogy of forcing people to give their money at gunpoint- any chance you’re a Ben Shapiro fan? If not, you should really check out his videos on the daily wire- I think you’d like them. And yes, I agree that taxing the rich more because they are rich is an unjust system. Personally I do think that society benefits from taxes- if everybody agrees that certain things are indispensable to a functioning society- but that this should be at a flat rate. Great post!

    Like

    1. Oh damn. You caught the gun thing xD. I prefer not to be a fan of anybody, because that makes me a bit partial to their arguments even when they aren’t that good. I do listen to a lot of people like Milo, Shapiro, TJ Kirk (I don’t know if you’ve heard of him) and I do often agree with their stances. Thank you for reading my post by the way. Very nice of you.

      Liked by 1 person

      1. haha don’t worry, I get exactly what you mean- I, like you, don’t consider myself a fan, but they can make good points and I like them enough to recommend (I actually have a very short list of people involved even tangentially with politics that I’m a fan of). Plus, I feel like these are the kinds of people that people are so offended by they completely ignore, or will be understood as often deliberately provocative and taken with a pinch of salt. You’re very welcome!

        Liked by 1 person

  2. I like your thoughts and ideas. In economics, one train of thought people take is that to make a tax, one component of that tax is that it must be equitable. It is no good if it treats one group of people more unfairly than another. People would be outraged if a tax treated poor people more unfairly than the rich. Plus, how do we decide who is rich. In my opinion, somebody who considers themselves as being poor but has a house is nowhere near as poor as someone who lives on the street and has to beg for food. It is very hard to tax a group of people in this way, especially when there are blurred lines surrounding them

    Liked by 1 person

  3. Hi Aayush!

    Thanks for inviting me to read this post. You’ve done an impressive job of systematically summarizing most of the standard arguments people make against attacking the rich.

    Your style is, as I expected, remarkably clear and easy to read. I greatly appreciate that you kept it civil, and did not stoop to doing what so many people do: Demonize people who don’t believe as they do.

    I think you did over-simplify some of the reasons people give for taxing the rich, but only a very few times. I am sure it was not your intention to do so.

    I also like that you did not indulge yourself in too many logical fallacies (I used to tutor logic at university — logic usage is something I always notice). It’s difficult for me to stay interested in reading intellectually sloppy writings, but I had no problem reading yours.

    We are agreed that policies and actions promoting equality of outcomes are a bad idea. I personally think it leads to tyranny.

    It interested me, however, that you did nothing to refute the single most important and substantial reason of all for taxing the rich. In fact you didn’t even mention it! I assume that’s because you are strangely unaware of it, and not that you are avoiding it.

    United States Supreme Court justice Louis Brandeis expressed that point well when he famously said, “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.”

    That is not a new idea. The truth of it has been known for a long time. Over 2000 years ago, the Roman author Plutarch pointed out that no republic has ever withstood for long a great disparity in wealth between its richest and its poorest citizens.

    I think you will find if you study history that Brandeis and Plutarch were only stating the obvious.

    You and I disagree on many other points, but I stand my praise for your article. Thanks for inviting me to read it!

    Paul

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    1. Hey Paul
      Thanks for the thorough review. I don’t really believe in demonising people, cause it’s not the people I disagree with, but ideas. I frankly don’t think I am in a position to make overly detailed arguments since I’m only 16 with no specific qualifications in the field of economics. If you point out the instances, I’d surely take a closer look at them and improve them to the best of my abilities.
      Also, teaching logic? That sounds extremely intriguing. If you’ve written about it on a post or something, do give me the link so I can read a bit about it. The concept of teaching logic really did spark my curiosity.

      I’m presuming from what you said
      that this most important point is the threat posed to democracy by concentration of wealth. Karl Marx talked about how the rich people can influence policies. To be honest, if you’re allowing individual autonomy, which I believe we should, then there will be people more powerful than others. I don’t see a clear way around that. In a democracy, however, the government requires votes and there’s only an extent to which it can bend in favor of any particular corporation or individual. Again, I’m not really sure if this is the big problem you mentioned, and though I don’t think I tackled it adequately, I believe that as long as power keeps changing hands and doesn’t stagnate, it doesn’t pose a threat to democracy.
      Cheers,
      Aayush.

      Liked by 1 person

  4. Hi Aayush!

    Sorry it’s taken me so long to get back. I’m toying with the idea of using your post as a starting point for my own post on these issues. I haven’t decided yet whether to do that, though.

    I don’t recall having posted specifically about tutoring logic yet. I like to teach, though, and it was fun and rewarding. My guess is you’ve got something of a natural aptitude for logic, much in the same way as some people are inclined to, say, music or athletics. I don’t know about that for sure, but that’s my guess based on what I’ve noticed about your reasoning skills.

    Just keep in mind that logic is like math: You never get so good at it that you never make mistakes, even simple mistakes. But you can always get a bit better anyway.

    Paul

    Liked by 1 person

    1. Well, it seems pretty interesting to me, so I’d encourage you to write a post about common logical fallacies and how to avoid them and stuff.

      Like

      1. Your wish is my command! I’ve written a post on what’s called the “naturalistic fallacy” that I plan to publish in the next day or so. I hope you enjoy it!

        Liked by 1 person

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