A long-termist’s view on taxing the rich

Now, I’m obviously not a socialist, nor do I believe in all people being equal. Some are quite a bit smarter than others, some are way more hardworking than most. And if one works smarter or harder, one deserves “more”. I also am a strong believer in capitalism in the sense that it’s the only economic system that takes the character flaws of most humans (greed, laziness, vanity) and make those flaws work for the common good. Those flaws invented the wheel, irrigation and the internal combustion engine. Greed and vanity have always been the counterforce to laziness, and in their perennial fight either more and better stuff gets made or better systems and organizations get created. Communism can never work, because it relies on people being altruistic (examples from history: the USSR, Cuba, DPRK). Altruism always runs out, eventually. Capitalism takes people for who they are, and turns their natural urges into productivity. That’s why it works.

So I’m a committed capitalist, but I also believe in equality of opportunity, or at least striving toward it. All people can’t be rich, but everyone should have a valid shot at economic security and personal fulfillment, regardless of background. This mainly revolves around access to education and a safety net to catch those who trip and fall – to help them get back up on their feet. And paying for this requires tax revenue.

I also do try to learn from history, and social upheaval tends to follow great income inequality. The French and Russian revolutions spring to mind as valid examples. Or Cuba, or the countless other revolutions in places where the income inequality is very large. All it takes -for a vain populist (at best) or a murderous psychopath (at worst) with a shitty economic plan – to mobilize the masses, is that the people with a much better plan do not consider tweaking it. And in the West these days, tweaking is necessary.

The problem in the West nowadays is not so much absolute poverty (which is scarce) but relative poverty. And relative poverty stings just as much, if not more. If you’re not starving, you have time to notice considerable differences in living standards and especially differences in access to opportunity. In many societies, this difference in opportunity and income has a racial dimension to it, in some it is colorblind. But the problem is there, and it’s not going away. The advances in IT are concentrating the rewards of productivity growth in ever fewer hands, growing the income gap between the few and the many even larger. This is by no means an original idea, but this issue needs to be addressed. It’s not to say, that there needs to be expropriation (which is always a retarded idea that results in everyone being worse off for it – like in Zimbabwe) or that people who innovate and build better things don’t deserve to enjoy their success, but as time goes by, we’re increasingly approaching a point where the masses will revolt, if things don’t change. All it takes is some radical with some charisma, who has never experienced the true nature of living under a socialist/communist regime and things will roll from there. Bernie Sanders is the canary in the coal mine. While by no means radical in the general context of western politics – in Europe he would pass easily as a “lefty” centrist – it is unprecedented that a self-described “Democratic Socialist” could enjoy large scale political support in the US. And his support base implies that it will only grow, not diminish. What if, at some point in the next two decades, someone truly radical with more support emerges because the vast majority of working poor and middle class kids have had it? Then it’s too late.

Being poor is OK if you’re lazy or stupid. But being working poor is not OK. Neither is it ok for the children of poor people to not have access to education, to give a chance to those who want to escape the vicious circle. We need to give them the tools so they can finish the job, to quote a well known, fat, alcoholic. So more taxes.

I want to stay rich. It seems to me there is a choice of paying more taxes now and in the near future or losing it all to agitated masses with pitchforks, down the road. I prefer the former. The rest of “the 1%” needs to realize this too before it’s too late. Nobody really wants to go to a “re-education” camp or gulag. Paying 10% more on capital gains is a small price to pay for that.

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