Monday, April 25, 2011

Who Needs 12 Flavors of Yogurt Anyway?

As the debate rages on over deficits and debt-limits, and due to feedback I've received from recent posts on the subject, let's briefly revisit the popular idea that increasing taxes on the wealthy, particularly (for this essay's sake) the mega-wealthy, might serve a constructive economic end.

note; I have no special affinity for the super-rich (i.e., billionaires), I don't know any, I don't always agree with their politics, and I absolutely believe they should pay their taxes. I will confess however that in the case of a few tech-geniuses who come to mind - as I here type on a feather-light wireless keyboard linked to a paper-thin notebook (all for less than a thousand U.S. bucks) - I so appreciate how they exploited every opportunity to pursue their separate interests...

The case for raising taxes on ten-figure Americans rests in the notion that they're flush with ever-increasing idle cash to the tune of tens, if not hundreds, of millions that should be disgorged from their multi-billion dollar estates and allocated elsewhere (for the greater good) by the government.

Now contrary to populist opinion, Bill and Melinda, while they can easily afford to pay higher income taxes, are not hoarding rubber-banded stacks of green pieces of paper behind some revolving bookcase or in a wall safe hidden behind a portrait of Great Grandpappy Gates. Nor are the far-stretching digits and commas representing their bank account balance balanced with the inventory of rubber-banded stacks of green pieces of paper locked away in their bank's vault. Nope, their tax-worthy fortune is in fact sitting in plain view.

It's in that new office complex going up on Main Street, it's in your neighbors' house, it's in the dozen frozen yogurt dispensers at the corner Yodigity, it funded your niece's tuition to Stanford and it's stopped at the red light in front of you. I.e., it's been efficiently distributed throughout the economy. Which begs the question; is it truly in our collective best interest for the likes of the Gateses (even if they themselves believe it is) to pay higher taxes?

Now the wealth-redistribution advocates do not at all appreciate that sentiment. They contend that, on balance, the economy will not take a hit if we simply transfer a few digits and commas from all the top-earners' bank accounts to the U.S. Treasury. That while construction plans would be cancelled, the neighbors' mortgage rate would be higher or they'd be someone else's neighbor in a less attractive neighborhood, your niece would do just fine at Chico State, and who needs twelve flavors of yogurt anyway, overall consumption will remain stable. It's just that our politicians will handle the resource allocation, as opposed to the private sector.

And on that, I rest my case....

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