Thursday, September 4, 2008

Capitalism,Taxes and Redistribution of Wealth

Taxes have a huge effect on the economy and are often the subject of heated debates. Very few can agree on who should take on the tax burden.

Often, our tax system quickly becomes a redistribution of wealth (AKA taking from those that earned it and giving to those that didn't) instead of a means to finance needed government activities like national defense. The respected economist, Walter Williams, pointed out what taxing the wealthy is really like in this statement:

"Why is it that Michael Jordan earns $33 million a year and I don't even earn one-half of one percent of that? I can play basketball, but my problem is with my fellow man, who'd plunk down $200 to see Jordan play and wouldn't pay a dollar to see me play. I'm also willing to sell my name as endorsements for sneakers and sport clothing, but no one has approached me. The bottom line explanation of Michael Jordan's income relative to mine lies in his capacity to please his fellow man. The person who takes exception to Jordan's salary or sees him, as my letter-writer does, as making "little contribution to society" is really disagreeing with decisions made by millions upon millions of independent decision-makers who decided to fork over their money to see Jordan play. The suggestion that Congress ought to take part of Jordan's earnings and give it to someone else is the same as arrogantly saying, "I know better who ought to receive those dollars."

Jordan deserves every bit of the wealth he accumulated because of the excellence he created through hard work and practice. Fans and consumers rewarded him for it. That is capitalism at its best.

I would like to make another point that is rarely made about taxing the wealthy or the middle class for that matter. The government robs them of the opportunity to choose of their own free will to give to those in need. Politicians take away that wonderful feeling of giving and helping others in need to turn around and take the credit for themselves. Not every wealthy person gives back of course, but most realize that giving value to others was the key to the door to success and wealth.


Danny J Norman said...

The government robs them of the opportunity to choose of their own free will to give to those in need.

Another aspect of the liberal left is to destroy Judeo-Christian values. Remember it used to be the churches that provided welfare in this country. But the hedonistic liberal left is terrified by value contradictory to their self indulgency.

What is interesting is that if the liberal really put their money where their mouths are (ie the George Soros' and the Hollywood) there wouldn't be a need for social programs.

Paying Taxes is Patriotic! Ha-Hey Joe, why not put up a couple dozen homeless up in that compound you have there in Deleware? Because you want to take a couple precious bucks from my measlely salary than do your "patriotic" duty and GIVE to charity.

Matt said...

Agreed. Thanks for your service to this country Danny. My wife was just talking today about PATH, a privately funded organization, that provides all kinds of services to those in need like getting medications for free, paying one electric bill a year when times are tough, and a bag of groceries every month or so. All without the government. What a novel concept ;)