When New York Rep. Alexandria Ocasio-Cortez came out with her proposal to tax all income above $10 million at a 70 percent tax rate, experts quickly pointed out the foolishness of the proposal – but that’s not enough for the nouveau left-wing socialists. The new left sees wealth itself as evil, and has full-on taken to promoting its elimination. But despite these nouveau socialists, wealth is the quintessential American success story, and the success of American billionaires should be celebrated.
Notwithstanding the detrimental effects to innovation of Ocasio-Cortez’s new income tax, Tax Foundation’s analysis showed that the proposal would raise relatively little revenue. Yet that didn’t stop Ocasio-Cortez and her army of Twitter progressives, because raising revenue was not the primary goal for some — it was going after the wealthy.
Depending on how it was implemented, Tax Foundation estimated that Ocasio-Cortez’s proposal would raise either $291 billion or just $51.4 billion over ten years. Either figure would barely make a dent in the $32 trillion estimated cost of her plan for Medicare for All — it would take 622 tax hikes of that size to pay for the estimated cost of Medicare for All.
But the real purpose for this cohort is to take the rich down a peg – or a few billion pegs. Some progressives simply dislike wealth, which prompted the great Margaret Thatcher to characterize an opposing MP’s argument as preferring that “the poor were poorer, provided that the rich were less rich.” One way to accomplish that is to simply confiscate any income above an arbitrary level through the power of taxation.
Of late, this goal has been clear for all to see. Ocasio-Cortez herself declared a “system that allows billionaires to exist” to be immoral (note the use of the word “allows”), though she was careful to add the caveat that it was immoral so long as extreme poverty exists alongside it. However, one of her policy staffers let the mask drop somewhat, tweeting:
“Bill Gates’ money hoarding makes him greedy, but maybe he goes 6/6 on the other deadly sins and, on balance, is a good person. Still, he’s a policy failure. The acquisition of that much wealth has bad consequences. A moral society needs guardrails against it”
That same day, Stephanie Kelton, a former chief economist for Democrats on the U.S. Senate Budget Committee, tweeted “No one makes a billion dollars. You TAKE a billion dollars.”
The fundamental problem with this line of thinking is assuming that the amount of wealth in the world is static. If this were true, then Kelton and Ocasio-Cortez’s statements would make sense — billionaires would have their wealth at the expense of others. Fortunately, this is not true, and one need not look at steadily rising American (and worldwide) GDP per capita statistics to know it.
Simply look at what amenities are available to lower income brackets — technology that did not exist two decades ago, such as smartphones, are now owned by 77 percent of American adults (thanks to innovators and billionaires such as the late Steve Jobs). Americans are richer in convenience too, as billionaires like Jeff Bezos have made it possible to order something online and have it delivered to the doors of 64 percent of American households within two days. Eric Lefkofsky, the billionaire co-founder of Groupon, created a service that connected local merchants with customers by offering discounts.
Other billionaires have provided good things to people in other ways. J.K. Rowling’s net worth comes in at just around $1 billion, a sum she earned by writing books that children (and adults!) around the world fell in love with. Parents who pay for J.K. Rowling’s books likely do not consider their money to have been “taken,” and likely do not resent Rowling for requiring payment for her work.
Our economy runs on a simple premise: in return for providing a service that a customer deems valuable, you can demand payment. That creates the incentive to provide these valuable services in the first place. That certainly doesn’t make every billionaire a saint, but it does mean that they created something that people around the country have found valuable. That’s a policy success, not a policy failure.
Andrew Wilford is a policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to tax policy research and education.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.