Soaking the Rich

Their tax plans are now out.  Both Hillary Clinton and Donald Trump have outlined the changes they intend to make in the tax code—and their approaches couldn’t be more different.  Whereas Clinton aims to raise taxes, Trump hopes to lower them.

Hillary, of course, condemns Donald for trying to reward his wealthy friends.  She describes cutting the business tax in half and lowering the death tax as an effort to squeeze the poor.  As she sees it, this is further evidence of his bias against the little guy.

What Clinton does not seem to understand is that lower taxes provide an incentive to invest and grow businesses.  Having made her own hundred million plus fortune on what amounts to political graft, she has no idea of what it takes to create jobs.  Although she promises honest work, she apparently does not realize it is the private sector that provides this.  The government only transfers money.

If Hillary studied her history, she would learn that during the Great Depression, tax rates on the rich were over ninety percent.  This practically brought the economy to a halt and, for nearly a decade, prevented the United States from achieving the recovery that all sought.

Maintaining one of the highest business taxes in the world has the same effect.  It is one reason that our economy has been growing at a mere one and a half percent annually.  This is not enough to keep up with our population growth, never mind to generate new jobs or higher incomes.

Not long ago, just to assuage my curiosity, I consulted Forbes list of the wealthiest people in the world.  I was looking to see if folks with inherited wealth dominated it—folks like the Rockefellers, Vanderbilts, and Astors.   Much to my surprise, they did not.

Indeed, the first old money name I recognized was that of David Rockefeller.  He was worth three billion and ranked below five hundred on the list.  At exactly the same level—also with three billion—was Oprah Winfrey.

Highest in the ranking was Bill Gates with seventy billion.  As importantly, he, and nearly all the other one thousand billionaires I reviewed (including Oprah), were self-made.  Many of their names were recognizable because they have founded well-known companies.

My guess is that most of these magnates would not have been nearly as successful had they labored under a Hillary-style tax policy.  They would have been poorer, but so would the rest of us.  It is thus doubtful that I would have my Apple computer, i-pad, or i-phone.  As a consequence, I do not resent Steve Jobs widow her billions.

Once upon a time most Americans did not begrudge the wealthy their riches.  The goal of ordinary people was to get rich themselves.  What they wanted was opportunity.  If they could start a business and make it grow, they too might be well off.

In Hillary’s universe, however, the objective has changed.  It now seems to be two-fold.  One goal is to obtain revenge on the wealthy.  The other is to ensure the most lavish welfare payments possible.

When I worked for the New York City Welfare Department, many of my clients unabashedly told me that their first concern was to protect their checks.  They did not want to jeopardize these by taking jobs they might lose.  And so they stagnated in self-imposed helplessness.

This seems to correspond with Clinton’s vision of an idealized future.  She apparently wants to increase the number of people receiving public assistance on the grounds that they will vote Democratic.  The more she can promise, the more grateful they will be.

If this strategy works, then one day we will be a nation of indolent lay-abouts.  Margaret Thatcher said that the problem with this quasi-socialist approach is that you eventually run out of other people’s money.  Hillary seems bound and determined to hasten that day.

The question is: Will we let her?  Or will people see through her plan for self-aggrandizement?

Melvyn L. Fein, Ph.D.

Professor of Sociology

Kennesaw State University