Monday, May 18, 2009

Exhibit A: Tax The Rich, Lose The Rich

BUFFALO NEWS -- Ending any speculation about another possible run for governor, Rochester businessman and Sabres owner B. Thomas Golisano said Thursday he will be moving his legal residence to Florida to escape New York state taxes.

Golisano told a gathering of Rochester business executives that he will remain as owner of the Buffalo hockey team, but he is fleeing the Empire State to avoid paying $13,000 a day in state income taxes (MP: Almost $5 million per year).

The billionaire earlier this year told The Buffalo News that the only thing keeping him in New York was his family. “The only reason I’m staying in this state is I have family here. Economically, it just doesn’t make sense,” he said in February.

But since then, Gov. David A. Paterson and lawmakers approved a state budget that will raise $4 billion in new income taxes this year on wealthier residents. In Golisano’s case —and anyone else making more than $500,000 this year — he is seeing his state tax rate go from 6.85% to 8.97%.

HT: R. Adams

39 Comments:

At 5/18/2009 12:53 PM, Anonymous Anonymous said...

ergo, there should be no taxes.

Is this correct?


- Noitstat Feich

 
At 5/18/2009 1:01 PM, Anonymous Anonymous said...

Paterson and the Democrats pushed these tax increases as a sop to the public sector unions who finance the Democrat party. The unions staged "grassroots" demonstrations against proposed cuts in spending.

People like Golisano have a duty to move and force this corrupt coalition (unions and Democrats) into crisis. The cause of freedom demands it.

 
At 5/18/2009 1:10 PM, Anonymous Anonymous said...

ergo, there should be no taxes. Is that correct?Cute. Why do you think every communist regime has had to build walls? Why are their citizens willing to risk life itself to escape?

You have no moral claim on your neighbors labor. As Benjamin Frankiln stated, "Democracy must be something more than two wolves and a sheep voting on what to have for dinner."

The tax code should not be abused to faciltate the political ends of a corrupt few at the expense of a productive minority.

 
At 5/18/2009 1:29 PM, Anonymous Anonymous said...

"ergo, there should be no taxes.No, the point is that the idea of fixing the budget by increasing taxes on those who are already paying most of the taxes can backfire. While the move is politically expedient because everybody hates evil rich people, it is not necessarily an economically effective move.

 
At 5/18/2009 1:34 PM, Blogger 1 said...

Now that we have a President who spends 'other people's money wildly' why shouldn't these liberal heads of the individual states not want to do the samething?

From Richard Henry Lee of the New York Daily News: It is no surprise that President Obama supports unprecedented spending and borrowing in the federal budget since he has never suffered any consequences from the excessive spending and borrowing in his private life...

 
At 5/18/2009 1:59 PM, Anonymous Anonymous said...

Assuming the 1:01 pm and 1:10 "Anonymous" are the same ....

You miss the point.

And chill out with your political blathering. I really don't care about your musings re: Communism or Ben Franklin ...

The point is, should tax rates (for all income classes) be static or dynamic --- depending upon the economic realities at the time?

Also, if raising the tax on the rich from its current state is "inappropriate" - it assumes that the current rate is optimal.

What evidence do you have to support that?

(For the sake of good order, and to avoid confusion - do not misinterpret this as a "rhetorical question." I am literally asking for data or evidence that supports the view that the current rate is optimal.)

Without this evidence, how can anyone make the assessment that a move from this level (either higher OR lower) is "wrong?"

The top tax rate has fluctuated from 91% in 1964 down to 28% in 1986 to 39.6% in the 1990s to 35% in 2001.

If the top tax rate goes back up 39% - the nation suddenly becomes "communist" or whatever?

Please ...

NF

 
At 5/18/2009 2:39 PM, Blogger 1 said...

"If the top tax rate goes back up 39% - the nation suddenly becomes "communist" or whatever?"...

So let me see if I understand your point NF, you have no problem with the state extorting from the productive in order to pander to the parasitic, right?

 
At 5/18/2009 2:53 PM, Blogger Marko said...

NF quipped:

"ergo, there should be no taxes.
Is this correct?"

This is the continuum fallacy, or slippery slope fallacy. Just because you think taxes are too high, or raising them higher will have negative consequences, does not mean you think the taxes should be zero.

The answer to your question, however is yes, there should be no taxes.

NF Again: Assuming the 1:01 pm and 1:10 "Anonymous" are the same ....

"And chill out with your political blathering. I really don't care about your musings re: Communism or Ben Franklin ..."

Maybe you don't care, but you perhaps forget that we may not care what you care about. Telling people what to do will not get you far.

"The point is, should tax rates (for all income classes) be static or dynamic --- depending upon the economic realities at the time?"

That is, perhaps, your point. I don't think it is the posters, or Carpe Diem's point. It certainly isn't mine. In fact, I have no idea what you are talking about. Of course taxes are dynamic, they seem to go pretty frequently.

"Also, if raising the tax on the rich from its current state is "inappropriate" - it assumes that the current rate is optimal."

This is called the straw man fallacy. The poster made no such point, and you are attacking him on the basis of something that he did not say, nor that is required by his position. He merely pointed out that he (and Ambassador Franklin) believe the tax code should not be abused for political purposes. To believe that, you don't need to argue the current rate, or any rate, is "optimal."

"What evidence do you have to support that?

(For the sake of good order, and to avoid confusion - do not misinterpret this as a "rhetorical question." I am literally asking for data or evidence that supports the view that the current rate is optimal.)"

He doesn't need to present evidence for a position that you fallaciously prescribe to him. You again seem to be forgetting that it is possible no one cares what you think he needs to do to convince you of something. Also, see my earlier point about telling other people what to do.

'Without this evidence, how can anyone make the assessment that a move from this level (either higher OR lower) is "wrong?" '

Without this evidence, it is still possible to show that raising rates from the current rate (regardless of what is "optimal", whatever that means) has negative consequences that may reduce revenue. In fact, the Carpe Diem post is attempting to do just that.

"The top tax rate has fluctuated from 91% in 1964 down to 28% in 1986 to 39.6% in the 1990s to 35% in 2001.

If the top tax rate goes back up 39% - the nation suddenly becomes "communist" or whatever?"

It seems like you are carrying on a different argument. Have fun with that. And again, to answer your question directly, yes, it suddenly becomes communist. Thank you.

 
At 5/18/2009 3:35 PM, Anonymous Machiavelli999 said...

1,

So, just to get it right, what you are saying is, we have been a communist nation since 1913 when the income tax was first introduced??

 
At 5/18/2009 3:42 PM, Anonymous Machiavelli999 said...

If the top tax rate goes back up 39% - the nation suddenly becomes "communist" or whatever?"

It seems like you are carrying on a different argument. Have fun with that. And again, to answer your question directly, yes, it suddenly becomes communist. Thank you.
So, at 36% tax rate on income over $250,000 America is a free market capitalist beacon to the world. At 39%, we should sing Soviet hymns?

I wonder what the country was in the 60s when the top marginal tax rate was 93%? Or in the 70s when it was 70 some percent?

I guess the historians have it wrong, the commies really did win the Cold War.

 
At 5/18/2009 4:18 PM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 5/18/2009 4:31 PM, Blogger randian said...

the commies really did win the Cold WarNearly every plank of the 1930s Communist party platform has been adopted by our government. That looks like a victory to me.

 
At 5/18/2009 4:43 PM, Anonymous Anonymous said...

Marko - you have a lot of things confused.

"Abusing the tax code for political purposes?"

Where is there any evidence of that being mentioned in either the WSJ op-ed or in the story re: Golisano ?

There is a real straw man argument.

The WSJ op-ed starts off by clearly stating the deficit problem that many states have. Maybe THAT is why state leaders are considering what to do - including the possibility of tax increases on the wealthy.


The "ergo" comment is a response to the author's "Bottom Line" post mortem to the WSJ op-ed.

It was an absurd, sweeping generalization. The stale - "lowering taxes on the wealthy is always good" / "raises taxes on the wealthy is always bad" argument.

As opposed to the more realistic argument that under certain circumstances, raising taxes on the wealthy may be bad. But under other conditions, it may be necessary or wise.

The "ergo" comment was to point out the absurdity of the author's one way logic by presenting the absurdity of the polar opposite.

Anyway, "interesting" application of the so-called "fallacies" by you ...

The request for metrics or some quantitative assessment or evidence is driven by the WSJ op-ed authors decision to use the more inflammatory "50% increase" description of the Illinois income tax rate, while conveniently leaving out that this would be a move from 3% to a maximum of 4.5%

The authors know, and I know, and you know that writing "raising state income taxes as much as 1.5%" is not nearly as dramatic as "50% !!!" Never mind that stating it would be a maximum of 1.5% would be quantitatively accurate and would convey the true order of magnitude. The authors know, and I know, and you know that associating "1.5% increase" with "soaking" would be a hard sell.

Which gets to the request for "evidence." How can you seriously debate tax policy without quantitative evidence?

For example, Nevada has no state tax. It is also a quantitative fact that Las Vegas and Reno rank first and fourth nationwide respectively in the percentage of homeowners with negative equity.

Wouldn't that be a factor to consider before moving your business to Nevada? Are there enough households with enough disposable income to buy what you have to sell?


Anyway, you are the guy who feels there should be no taxes at all - which makes you a really "serious" guy ...

And you fear that, if it happened, the 1% or 1.5% increase in the Ill. state income tax would ultimately lead to "communism."

If you research the "fallacious slippery slope" argument, you'd find your picture posted next to the definition.

Have a nice day.

NF

p.s. - btw - I hear the clothier Paul Stuart is having a nice sale on Mao Suits ...

 
At 5/18/2009 5:09 PM, Blogger 1 said...

"So, just to get it right, what you are saying is, we have been a communist nation since 1913 when the income tax was first introduced??"...

Now mach in all seriousness that is truly an excellent question...

Actually our commie days started seeping in with the advent of constitutionally questionable entitlements...

When the federal government decided that Article One, Section Eight of the Constitution just wasn't enough work for them is when the problems began...

FDR's Ponzi Scheme makes Bernie Madoff look like a rank amateur by comparison...

 
At 5/18/2009 6:28 PM, Anonymous Anonymous said...

NF's question is an interesting one. What is the optimal tax rate?

How many turns of the wheel can the subject endure without suffering dislocation? Forget that he is an individual with a moral claim to all the fruits of his labor. How much can we squeeze out of him?

Well, here's a clue. Kennedy cut taxes and government revenue increased. Reagan cut taxes revenue increased. Bush cut taxes again and revenue increased. So, I would advise cutting taxes until revenue stabilizes or falls off. Oh, but wait, it's not about funding the government, it's about "fairness". (I love the part about spending our kids money - from the biggest spender in history)

You see, F, it's you who misses the point. While the wealthy have quietly endured shouldering the lions share of the burden, that doesn't make them your slaves.

 
At 5/18/2009 6:49 PM, Anonymous Anonymous said...

Even John Dillinger knew that if you wanted to get money you had to go to where the money is.

If you tax everyboy you still tax the rich and get most of the money from the rich.

If you tax the poor you get no money.

What revenue enhancement plan will the rich agree to? Trickle down?

Reduce taxes to grow the economy and grow revenue that way? Great, as soon as you get the revenue enhancement, if ever, the cry will be to reduce taxes, thereby defeating the revenue enhancement. Continue this cycle until "ergo, there should be no taxes". And at every step along the way to zero taxes and zero revenue the rich will still pay more than the poor.

Isn't that why we have rich people, so they can pay more taxes? And have more left over after taxes?

As it stands now, you can make more money than 95% of the population and the 4% above you will still have 95% of the wealth.

Of course taxing the rich is unfair, so is John Dillinger robbing the banks. But that's what you do if you need money.

Whether this is fair or not has nothing to do with Professor Perry's observations as to what ELSE happens. Nor do his observations change where you have to go to get money.

If people leave the state, or don't come into the state, or decide to cheat the state, then that suggests there are limitations as to how much you can get, but it doesn't change where you get it.

Absent some information on the shape of the Laffer curve (probably not a bell curve as usually depicted), and absent some information as to which side of the peak we are on, no conclusions can be made. As to whether this is a good idea or not.

Instead, we have an empirical experiment: raise taxes, if you get more revenue then you are still to left of the peak.

Second order question is how often and at what level can you continue this? As Perry points out it may affect the growth rate, such that over time the net present value of revenues is not optimized. But, how taxes affect the growth rate is offset (somewhat) by how effectively the revenue is spent.

If it is spent in a way that develops world class infrastructure and services then growth may continue in spite of the exodus of a few rich people.

Unfortunately, our experience in watching government spend meoney leads us to the conclusion that this is unlikely, or at least it carries a high overhead.

So, our societies total cost is the cost of doing what we do (production) + the costs we impose on others (externalities or theft) + cost of preventing or moderating externalities (government). The idea is to achieve the lowest total cost.

We can move in that direction, certainly, by lowering the cost of government, but as we have seen recently, that may result in an increase in other externalities (theft). If you tax something you get less of it, true enough. but it does not follow that if you tax nothing you will have plenty of everything.

Put another way, you MIGHT have more of everything, including externalities, in which case your total costs will undoubtedly be higher: there being no cost to externalities people will use too much of them.

-----------------------

We have no moral claim on our neighbors labor or the fruit thereof, being his property. And equally we have no right to aggrandize ourselves at his expense. We have government to protect the rights of the (one) sheep at dinner, but we also have government to protect the wolves.

The flock has no more right to starve the wolves (just because of greater numbers) than the wolves have to decimate the flock.

Taxing the rich wolves is not necessarily economically effective move, but the rich have yet to step up and say what is. When will they have enough to stop decimating the flock?

The problem is that no one is SERIOUSLY trying to determine the best balance (the lowest total social cost, which includes the cost to the rich, and disproportionately so). Balance is a dynamic act and so it seems obvious that it will change over time. We might have to pass up on the best net present value of all future social costs because of expediencies now.

Rather than seeking balance by changing position over time, each special interest stakes out a territory in which they argue that their policy will lower total costs, but which is really about gaining some advantage over others. they think everyone else should move (do work) to maintian THEIR status quo or THEIR balnace.

Anonymous 1:10 and anonymous 1:29 are BOTH right, but we have yet to determine to what degree. We are not going to find out by simply blaming the other political party.

NF is correct, it seems to me. There are various top rates and various total rates at work in countries around the world. With eneough number crunching we ought to be able to come to some conclusions as to what values are out of range.

Ronald Reagan was a personal victim of extremely high tax rates and campaigned against them, but even he had to raise taxes. Probably we can agree that 95% is too high and 20% is too low, for top rates.

All we have to do is negotiate all the rest. It is no more fair to tax the middle class to support the poor than it is to tax the rich to support the poor, but the fact remains we cannot tax the poor to support the poor.

What we can do is cast the poor, weak, helpless, cluelss, and defensless out on the streat to fend for themselves (and give them "incentive" to do better). I personally doubt that we would find that wading through the refuse of humanity every day as we go to work increasing our business makes us any better off.


Yes, there should be no taxes. in a perfect world there would be no reason for them. This isn't a perfect world so the point is how to minimze something else, that being the cost of running the world. This will maximize everyones opportunity without necessarily meaning their success will be equalized.


Miller has it pretty close, and a lot more succinct in simpy saying the objective function is to optimize the production of public goods with the lowest level of government possible. I would only modify it to include the optimum level of public and private goods with minimum government AND minimum externalities.

We would hate to find out one day that the optimum level of public goods occurs when some despotic genious has stolen it all from us. In that case we would have too much externality and too little government.



Hydra














Hydra

 
At 5/18/2009 6:57 PM, Blogger Craig said...

"Also, if raising the tax on the rich from its current state is "inappropriate" - it assumes that the current rate is optimal."

No, it doesn't. To begin with, this post is about state income taxes -- not federal taxes -- so please don't change the subject. Current tax rates are certainly not optimal in New York as people have been fleeing by the hundreds of thousands for decades.

What else do you need to know? When confronted with the facts that people are leaving the state because of high tax rates to states with lower tax rates, you ignore it all and attempt to start a debate about "ideal" tax rates.

Here's a thought. There is no ideal tax rate that applies for all time. But when tax increases result in smaller than calculated increases in tax revenue, you might have a clue that the rates are too high. If, that is, you're more interested in maximizing tax revenue than you are in using the tax code to punish those you consider to be privileged and greedy.

 
At 5/18/2009 7:08 PM, Anonymous Anonymous said...

ergo, there should be no taxes.

Is this correct?
[space]

No.

But perhaps the system would function better if the disparity between the low end and high end weren't so high. There's a big difference between a zero (or a negative) tax rate and a 39% tax rate.

My gut feeling is a fixed rate across all income with no exceptions might serve us best. Also, it could be collected at the source and thus most wage earners would never have to file a tax return (a nonproductive use of time, effort, and money).

Mark

 
At 5/18/2009 7:43 PM, Anonymous Anonymous said...

Anonymous at 6:28 - I have no desire to make "them" my "slaves," as I am a member of that group ...

Hydra - great post.


Craig - Specifically mentioned Illinois and Nevada. Used the changes in the Fed tax rate over time as an easy example. State rates (for those that have 'em) have bounced around over the same period. There was no subject change.


Good night, all.

NF

 
At 5/18/2009 8:25 PM, Blogger sethstorm said...

You have no moral claim on your neighbors labor.
Nor does business have a moral superiority that amounts to a modern day "divine right" over law.

 
At 5/18/2009 10:03 PM, Anonymous gettingrational said...

I don't have much agreement with 1 but his line "extorting from the productive in order to pander to the parasitic ..." is so poignant. This is our apologizing lounge act "Barry Obama" playing to the crowd for the applause.

 
At 5/18/2009 10:48 PM, Blogger QT said...

There is another element to tax policy which has been mentioned in passing, namely, the deadweight of taxes on economic growth. Old Europe offers an excellent example of high taxes and low growth rates.

Consider that if you divide 72 by the growth rate, you can determine the number of years it takes the economy to double in size. Between 1975 - 2000, China has averaged 6% growth meaning that its economy has doubled in size every 12 years. At the present rate, China will become the world's largest economy by mid-century.

There are also externalities associated with punitive tax policy, an excessively complex tax code, profiligate public spending, and low growth.

 
At 5/18/2009 11:44 PM, Blogger randian said...

Nor does business have a moral superiority that amounts to a modern day "divine right" over law.That's just meaningless spam. Nobody has suggested that they do.

 
At 5/19/2009 9:51 AM, Anonymous Anonymous said...

NF, you really do not understand. Are you proposing taking money from people who are productive and giving it to those who are not? Hmm, let's see. Grow an economy by redistribution. Has that ever worked? NO.

 
At 5/19/2009 10:16 AM, Blogger Marko said...

Dry. Humor.

Apparently too dry for some, sorry about that. Yes, we probably need some taxes - although I would note that we needed a constitutional amendment to levy them on individuals. That would no longer be necessary since even the current supreme court seems to have forgotten the enumerated powers doctrine.

No, a high tax rate does not make us communist, since we are still allowed private ownership of real estate and other goods, but obviously the higher the tax rate, the less we truly own anything. At some point it becomes confiscatory. It is more of a continuum than a clear demarcation. In my opinion, we have clearly been becoming more socialist since the passage of the 16th Amendment in 1913 rode a wave of populist socialist sentiment to tax the rich. The tax rate went up and up, and then the marginal income tax rate for individuals went back down, and now looks to be going up again.

I think we have clear evidence that the economy grows more when the taxes are lower. That's all I need to advocate lower taxes, and lower spending.

 
At 5/19/2009 10:34 AM, Blogger sethstorm said...

That's just meaningless spam. Nobody has suggested that they do.
Then why do we have to please them above all others in the economy?

I don't believe it's not so much the money itself that's the issue as much as it is the influence that comes with it. See the 1980's, a turn from business as a partner to the community to business as a pantheon of godlike individuals far removed from their previous role.

The business world didn't lose its reputation completely in the 1980's for no reason at all.

 
At 5/19/2009 10:48 AM, Anonymous libtard said...

In other news, I guess someone found out that John Galt is hiding out in Florida.

 
At 5/19/2009 11:53 AM, Blogger Size said...

Isn't that why we have rich people, so they can pay more taxes? And have more left over after taxes?No, you don't have rich people so that you can enslave them. You have rich people because some people decided to be productive and take risks. To tax them they have to continue to be productive and take risks. Being productive and taking risks is costly. If you tax away their profit such that the cost of producing is no longer worth it, you will have no rich people to tax. Then, you'll be the "rich" person and you will be taxed. See, "rich" is relative.

As it stands now, you can make more money than 95% of the population and the 4% above you will still have 95% of the wealth.That's because they created it. If they hadn't created it, there would be no wealth. And you would have no job and no goods.

Good luck marking down the road to serfdom.

 
At 5/19/2009 12:41 PM, Blogger 1 said...

"If you tax everyboy you still tax the rich and get most of the money from the rich"...

Ahhh, the lovely illogic of the socialist...

The problem remains is why should someone who has more pay more? Why should the productive and successful pay one more penny in taxes (regardless of whether its local, state, or federal), in a sense be punished for being successful...

Why should the rich be punished via government extortion practices just to bolster those at the bottom of the economic ladder?

NF chimes in with this: "The WSJ op-ed starts off by clearly stating the deficit problem that many states have. Maybe THAT is why state leaders are considering what to do - including the possibility of tax increases on the wealthy"...

Funny thing, how come there's little mention of cutting programs, ususally the socialist safety net programs (all thoroughly corrupt wastes of money as a little investigation always shows) that suck up the majority of the tax receipts...

sethstorm makes this rather bizzare statement: "The business world didn't lose its reputation completely in the 1980's for no reason at all."...

On what planet did this happen on?

What the socialist/Keynesians forget is what Robert Samuelson reminds us of: Poor Aren't Poor Because Rich Are Rich

 
At 5/19/2009 1:25 PM, Blogger Size said...

Funny thing, how come there's little mention of cutting programsCutting programs? No. NY state want to increase welfare payments 30%.

It's much funnier to me now that I've left New York. Moved to a lower tax state 2 years ago because the taxes are lower.

 
At 5/19/2009 1:48 PM, Anonymous gettingrational said...

Size's comments on the 4% who have 95% of the wealth created that same wealth is subject to debate. Bill Gates and Warren Buffett have vast wealth BUT they do not want this massive wealth inherited by non wealth creators. Inherited wealth is created only in the sense of their children's extemely good choice of parents.

Another issue is the consolidation of wealth such as U.S. Steel or Standard Oil. The ability to dictate price because of high market shares enables wealth concentraion but no wealth has been created.

Taxing the productive with high tax rates is plain wrong. Breaking up the price dictators and taxing huge wealth inheritors betters the ability of the wealth creators.

 
At 5/19/2009 1:57 PM, Blogger sethstorm said...

"The business world didn't lose its reputation completely in the 1980's for no reason at all."...

On what planet did this happen on?
This one, right here and now. I distinctly remember the time when honest, US-based businesses existed as partners to the community. Now they think they're to be treated as if they were a deity; they complain up to the point of offshoring and bailouts if they are not.

Stop giving them a reason to use taxes as a weapon. Then you might see your tax cuts happen faster.

 
At 5/19/2009 3:27 PM, Blogger 1 said...

"This one, right here and now. I distinctly remember the time when honest, US-based businesses existed as partners to the community"...

Well sethstorm they STILL are partners in the community but if the community continues to leech off the businesses excessivly then is it any suprise that businesses go elsewhere for a better business environment?

"Now they think they're to be treated as if they were a deity; they complain up to the point of offshoring and bailouts if they are not."...

Apparently you've forgotten or refuse to admit that it was the federal government for the most part tended to push businesses into today's present situation... You've been shown all this before though...

Driving jobs offshore: the crushing burden of government regulation plays a key role in the ongoing exodus of American jobsLet's not forget where the majority of today's problems started, with those lovely GSEs: Fannie Mae, Freddie Mac Turmoil Pose New Economic `Headwind'"Stop giving them a reason to use taxes as a weapon. Then you might see your tax cuts happen faster."...

Which would mean that dumping these Congressional clowns out on the street can only do good for the rest of us...

 
At 5/19/2009 5:01 PM, Blogger randian said...

The problem remains is why should someone who has more pay more?A friend of mine argues that they should pay more because they've used "the system" and gotten more from it. It pisses me off because I know it's wrong but I don't have a good rebuttal. He also tends to use "society has decided" as the final argument for everything. I find it infuriating when he accuses me of being rigid and closed-minded.


Inherited wealth is created only in the sense of their children's extemely good choice of parents.Are you seriously arguing that once wealth is inherited it is no longer created wealth and therefore it's ok to steal it via the tax system?

 
At 5/19/2009 6:09 PM, Anonymous Anonymous said...

Bill Gates and Warren Buffett have vast wealth BUT they do not want this massive wealth inherited by non wealth creators.Sure they do. That's why they're giving it away to the needy. The needy are needy because they haven't created wealth.

Who cares what Gates and Buffet want? They created that wealth and they should dispose of it as they please just as I should dispose of mine as I please. Why should your non-wealth creating children have more right to it than mine?

Another issue is the consolidation of wealth such as U.S. Steel or Standard Oil. The ability to dictate price because of high market shares enables wealth concentraion but no wealth has been created.The biggest issue here is that you don't have even a slippery grasp of economics. How do you think those companies got such high market share? By pleasing the customers. Damn that John D. Rockefeller and his improvements in the quality of kerosene and dropping the price of the produce 80%!!! No company dealing in commodities can hold on to market share if it increases its price above that of its competitors. Immediately, competitors would gain market share at the expense of Standard Oil.

Here's a basic lesson in wealth creation: when U.S. Steel takes different metals and combines them in such a way that the combination is worth more than the sum of the ingredients, wealth has been created. If they didn't do that, there would be no profit and soon, no U.S. Steel.

....unless, of course, it produced trash, had a politically powerful union and a president willing to rob taxpayers on their behalf.


Breaking up the price dictatorsSure, but that would require killing government created monopolies because they are the only ones who can dictate price.


and taxing huge wealth inheritors betters the ability of the wealth creators. taxing huge wealth inheritors betters the ability of the wealth creators.How? If I work extra hard so that my children may be taken care of in the event of my death and I know you will rob them upon my death, I won't create that additional wealth. Instead, I'll spend more time with my kids - and use that time to teach them every tax evading loophole I know. Or I'll simply spend every penny I have on raucous living! Much more fun.

Incentives matter. No matter when you create wealth, if it is slated for confiscation, it won't be created in the first place.

-Size

 
At 5/19/2009 9:11 PM, Anonymous gettingrational said...

Radian, you don't seem to know that would be competitors need capital to compete. Who would lend to a would be compeititor in a capital intensive industry. I doubt you have ever had to met a payroll with your own capital on the line or the bank breathing down your neck for repayment.

John D. was ruthless in eliminating competition and not in pleasing customers. U.S. Steel was created overnight in combining hundreds of small steel producers into a larger producer overnight. I suspect you know this; thus what is your point?

The bottom line is that wealth creators and the producers that win an open capitalist business environment should be rewarded. The big problem today is collusion of monopolists such as General Electric's light bulb divison and Government controlled factories in China gaining control of foreign markets such as the U.S.

 
At 5/19/2009 9:13 PM, Anonymous John Galt said...

I distinctly remember the time when honest, US-based businesses existed as partners to the community.This is almost a direct quote from James Taggart in Atlas Shrugged.

Either Ayn Rand was prophetic, bad ideas never die, or Sethstorm gleaned the wrong lessons from the book. It was a book about a dystopian society Seth, not an instruction manual!

Corporate Social Responsibility is actually a major field in the MBA program at UC Berkeley. Unbelievable!

 
At 5/20/2009 1:34 AM, Blogger sethstorm said...

Driving jobs offshore: the crushing burden of government regulation plays a key role in the ongoing exodus of American jobs
Pardon if we actually care about our citizens here in the United States of America.

Here, I don't have to worry about slave labor, substandard quality products, and any violent backlash from reporting businesses that do actual wrong. I can't really say that for the countries to which receive those jobs.
Beyond environmental regulation, it is just an excuse to say "regulation did it". Offshoring is done primarily to evade the demands of citizens. When law firms (such as Grigsby & Cohen) can't do dirty pool with immigration law, you might have an argument.

This is almost a direct quote from James Taggart in Atlas Shrugged.
It's a coincidence based on my experience.

Also:

It is a very rare breed of company that even considers humanity in the workplace these days. 20-30 years ago, it was only beginning to decline. Now, it's a liability to care more than those of the Third World do for their citizens.


It was a book about a dystopian society Seth, not an instruction manual!
I certainly see people quoting it as if it was the manual on how to deal with government intervention.

 
At 5/20/2009 7:22 AM, Blogger 1 said...

"Pardon if we actually care about our citizens here in the United States of America"...

Yeah sethstorm such caring puts people out of work... Do you feel better for that?

"Here, I don't have to worry about slave labor, substandard quality products, and any violent backlash from reporting businesses that do actual wrong"...

Hmmm, the typical leftist mantra sans anything credible to back it up of course...

'substandard quality products'...

'backlash'?!?!

I guess you've not been paying attention to all the various recalls, especially in the American auto industry right?

"Beyond environmental regulation, it is just an excuse to say "regulation did it". Offshoring is done primarily to evade the demands of citizens."...

Well if the citizens want it, let them buy the company and let them run it... Otherwise all YOU are doing is allowing the theft from the stockholders who happen to be citizens also...

 

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