Redistributionist Rebuttals
A Voice for the Market
As we close out 2023 and move into 2024, the Cossack will review the typical arguments for income redistribution and offer rebuttals to those arguments.
Income Redistributionists desire to levy high taxes on the rich and super rich. In 1953, the marginal tax rate on exceptionally high earners was over 91%. Supporters of income redistribution believe that the capitalist market system no longer applies to the world and that socialism is the next and desired system to replace it. There are a few base arguments used by Redistributionists to support their socialist agenda, which are used to make slogans, chants and rhetoric for the foot soldier protestors:
The rich got their money using immoral processes; they stole their money
The rich buy government to favor their own profits
The rich will work hard under any tax rate, therefore innovation will continue
Beyond a given amount, nobody needs a lot of money
Capitalism is abnormal, the natural economic state is income equality. The presence of rich people represents an abnormality
Government is a good steward of the poor and the economy, therefore extreme tax rates will be used to eliminate poverty and promote income equality
These are the most salient base arguments that are used in the development of pro income equality I know or could find.
There is significant advocacy for government. Members of Congress, presidents, administrative state actors and the main stream media are chief advocates for government to get larger, consume more resources and control the economy.
But who speaks for the free market? Beyond Adam Smith, there does not seem to be anyone. A free market, in conjunction with a few established governance processes such as those that protect property rights, provide the basis for wealth creation. Government spending, for example, was 6.5% of Gross Domestic Product (GDP) in 1907, yet property and other rights were protected. Compare that with government spending recently of 43.6% in 2021 or 37% during 2022. Government is 7 times bigger relative to GDP, which means that the federal government is growing much faster than the economy as a whole. Government advocates seem to be winning. The question is at what cost?