Of course there are many. But for my purposes let’s not think of the impacts on capital formation and entrepreneurial innovation. I am thinking from a populist perspective. The problem with raising top income tax rates is that they are not retroactive. I mean that. Among the strongest supporters of raising top tax rates that I know are the folks I went to Amherst with. And let me tell you a little bit about Amherst. There were more families with over $10 million in wealth than there were with less than $100,00 in wealth. Coming from Queens it was like walking right into the twilight zone. Never felt more out of place in my life.
In any case, these families accumulated their fortunes in the past. Some with income tax rates that were high, but others who enjoyed the lower top tax rates that have prevailed for the past 50 years. They have their stash already. Indeed, I cannot think of a single friend of mine whose family not only does not have a nice house, but that does not also own a spectacular vacation home on gorgeous islands in Maine or on the Rhode Island coast or in the New Hampshire mountains and elsewhere. Not one. Raising top tax rates will not affect these people one iota. Indeed, I wonder regularly just WHO these people think the top tax rates are going to hurt. I have this image that they think there is a cabal of gun toting, Fox-News watching crazies that will suffer from high marginal income tax rates and that would put an end to them and evil people like the Koch Brothers (how’s THAT for embracing and celebrating diversity! And remember that “celebrating diversity” was rammed down our throats for years, yet I’ve never seen a group of more hateful people in my life).
So, regardless of who is going to be nailed by high top tax rates, the lives of my fashionably lefty friends will be unchanged. They’ll enjoy their leisurely summer get togethers with multiple generations of their families, all of whom who have long lineages of wealth, prestige and influence. They will continue to own spectacular properties, long since paid off, that are exclusively theirs – that almost no human on the planet would have an ability to enjoy (seriously, I know people who own their own private islands) and this will be true whether top tax rates are 0% or 100% or even more.
I will actually support the idea of top higher tax rates when such supporters do me a favor. That favor? Tell me exactly what kind of income is acceptable. Tell me what kind of wealth is acceptable. Tell me what kind of lifestyle is acceptable. And then consistently put yourselves into those categories. I am 100% sure that island-owning Amherst-ites would not be willing to give away their private islands in the name of equality, fairness and rightness. But what makes it OK for them to own multiple homes and islands and not for someone like the Kochs to do so? Are only some high income or high wealth people evil? If that is the case, then how can we use income or wealth as a measure of evil?
Thus the problem with high top tax rates is that they are nothing but a red-herring. Let me see my fellow Amherst alums divest themselves of their ill-gotten wealth (after all, many of them are lawyers and high-flying Wall St. types) and live just like they want everyone else to live. Let them tell me that no one should live on more than 1/2 acre, that no home should have more than 2 bathrooms, that no one should own more than one home, and further to tell us exactly how the envision people are supposed to live. How many vacations should families take? To where? Can we have season tickets to a sporting team? Can we have two cars? When can we buy new clothes? What kind? Seriously, what, exactly, is the problem?
And if “the problem” is that “the rich” control the government, I’d suggest the problem isn’t that there is “the rich” out there. But when one is in the church it is hard to recognize such a fact. You do realize that 99.9% of priests believe in God, right?
So, Amherst-ites and other wealthy people, sell all of your stuff and give away the proceeds and have yourselves live like you say everyone else should, and I’ll get right behind your tax the rich proposals. Because what you should be advocating is “tax the wealthy” and not just a high income tax.