Thursday, June 14, 2007

An experiment in wealth envy

This will be my only post today, since I've got a nasty sinus headache (possible infection, will see when I go to the doctor). Anywho, this is depressing yet accurate analysis from Neal Boortz:
Class warlords and those suffering from wealth envy might not want to hear this, but our federal budget deficit is shrinking. The deficit through May of 2007 is down 34.6 percent from the same period a year ago, now totaling about $148.5 billion.

Why? Prosperity, that's why. Incomes are up. Corporate profits are up. Unemployment is down. Much of this is driven by tax cuts. That's right ... tax cuts. It's all very simple, really. You allow people to keep more of what they earn, and they will do more to earn more. It's a lesson as old as civilization. You get more of the behavior you reward, and you get less of the behavior you punish. Most (but certainly not all) parents recognize this. The more you penalize hard word with high taxes, the less hard work you will get. The more you reward achievement and hard work the more work you'll get. More work = growing economy = more government revenue = lower deficits. If, that is, the government doesn't increase spending faster than the revenue increases. (Yeah, like THAT will happen. - Ed.)

In the midst of this good news, just what are our friends in the Democrat Party proposing? You guessed it; more taxes. They want to punish this hard work that's going on out there with higher taxes on the higher achievers. The goal here is not to increase government revenues. Even Democrats are smarter than that. They realize that these higher taxes they're talking about will likely slow down our economic growth. Their real goal is power, and power comes from the ballot box. They know that a huge segment of their voting base wallows in envy every single day of their lives; envy of the wealth accumulated by those who have worked harder and smarter than they. They want these people punished ... NOW! And they believe that the best way to punish these high-achievers is to take away more of that which they are working for; their wealth.

Wealth envy is nothing new. In fact, we can thank wealth envy for our current income tax system. When the 16th Amendment (income tax) was being sold to the American people the proponents of a new federal income tax needed a way to get people to ask their states for ratification. Wealth envy was the key. The people were told that only rich Americans would ever have to pay the income tax, and virtually all of these rich people lived in the Northeast; generally in Massachusetts, Connecticut, Pennsylvania and New York. The voters in states like Michigan or Kentucky had nothing to worry about. They would reap the benefits of all of this new federal spending without having to pay a part of the tab. Only the evil rich would be hit. The 16th Amendment sailed through.

How far will people go to hurt someone that has more than they? They'll even go to the point of hurting themselves -- quite willingly -- in the process. Some years ago researchers gathered a cross section of Americans together to play a game. They were each given a set amount of play money. Some were given more than others. The subjects were then allowed to play an investing game. At the end of the game some had acquired more "wealth," while others had lost. Those with less wealth were then approached and asked if they would like to "burn" some of the dollars earned by the winners in this investing game. They were told that for each dollar they were willing to give away, four dollars would be taken from a rich person. They would get absolutely nothing for their dollar except the pleasure of knowing that one of the "winners" was having money taken from them. To nobody's surprise, most of those with the fewer dollars elected to throw away some of their money just for the joy of knowing that one of the "winners" was getting nailed.

And so it goes with our economy. You could tell your typical lower-income Democrat voter that if taxes are raised on the evil rich it might slow down our economy. You could tell them that a slowing economy and lower corporate profits might mean fewer pay raises. You could tell them that an economic slowdown brought on by higher taxes might mean fewer job opportunities. You can tell them all of the negative consequences of increasing taxes on the high-achievers, and it won't make a difference. They are perfectly willing to take a hit if they just know that those nasty rich people are taking it in the chin.

Democrats are well aware of the dynamics of wealth envy and voting. They give the voters what they want -- punishment for the wealthy -- and the voters will respond with their votes, even if it hurts them to do so.

Ain't life grand?