Billionaires are wise to distrust the “one-time” promise.
The American Spectator | USA News and Politics
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| Uncle Paul's Parodies |
"No matter what happens in Tuesday’s elections, support for wealth taxes keeps growing. Its justification is based on the idea that the very rich owe all of us something, and taxing their fortunes is collecting on that debt. We’re told their success fuels inequality and that it’s selfish of them to keep so much, especially if they don’t proclaim that they want to do more for society.
"Former International Monetary Fund chief economist Olivier Blanchard of France recently gave this narrative a clear voice. Writing on X, he wondered why California’s wealthiest are spending so heavily to defeat Proposition 40, the supposed one-time 5 percent tax on the net worth of billionaires. Blanchard added that billionaires “typically have not indicated that they are building their wealth to eventually make the world a better place.”
"The entire notion misunderstands how fortunes are made. In a market economy, people don’t build great wealth first and redeem it later through good works. They build it by making the world better first.
"When I buy an $800 smartphone, it’s because I value the phone more than whatever else I would have bought with the money. The seller values my $800 more than they do the phone. We both walk away richer by our own measure. Neither owes the other anything more.
"Repeat this exchange a few hundred million times, and vast fortunes take shape for the people who create amazing technology so abundantly and affordably that we take it for granted. More importantly, though, people hand over every cent of it voluntarily.
"As my colleague Arnold Kling aptly explained over the weekend, “Profits are earned within a positive-sum game for society. Profits induce firms to serve consumers and to innovate.” The drive for wealth taxes relies on “the opposite point of view. It regards profits as something that businesses take from the rest of us, as if we can take innovation and efficiency for granted. [It] acts as if we are in a zero-sum environment in which one person’s gain is necessarily another person’s loss.” . . . More.
Veronique de Rugy is the George Gibbs Chair in Political Economy and a senior research fellow at the Mercatus Center at George Mason University.
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