Sunday, September 28, 2008

Paid to BE Rich

Republicans like to complain about welfare handouts: how they make people lazy, how they break down the family, how they lead to criminal behavior. Fair enough.

But what about the old money rich? They get checks in the mail without working as well: dividends, rent, interest, capital gains, trust fund stipends… You don’t much hear Republican activists complaining about such “unearned” income – unless the recipient happens to be married to the Democratic Party presidential nominee (Teresa Heinz Kerry).

Instead, Republicans tend to celebrate passive income. They complain of “death taxes” and “double taxation.” They often call for cuts or the repeal of the corporate income tax and capital gains taxes. According to many Republican politicians and advocates, you shouldn’t pay taxes on your income unless you had to work for it!

In all fairness to said Republicans, some of their arguments have merit. The U.S. savings rate is too low, and robbing those who make passive income would make it lower. Socking mourners with a huge tax bill is mean-spirited; an entire industry revolves around skirting death taxes. And yes, old money aristocrats do play an important role in a healthy society.

But old money aristocrats don’t need welfare from the government! Such is the core theme of this blog. The rich are subsidized for being rich. Well over a trillion dollars each year is diverted by the federal government towards boosting the rate of return for those who have money to invest. And that’s above and beyond so-called corporate welfare. States and localities raise this subsidy figure even higher. In other words, the rich receive at least as much largesse as the poor.

If you want to know what ails the middle class, you have come to the right place. Over the course of the next few months I’ll reveal the gigantic indirect subsidies to the old money rich. These subsidies come at the expense of wage earners and entrepreneurs alike. I’ll expose:

  • How the U.S. federal government directly subsidizes those with money to lend – to the tune of nearly a half trillion dollars so far in the current fiscal year.

  • A social welfare program that protects the old money rich from competition, to the tune of nearly $800 billion so far this fiscal year.

  • How state and local government subsidize old money investors and how the federal government encourages the practice.

  • How the federal government encourages debt servitude by the middle class, providing billions more for the money-lending class.

  • Some extremely easy ways to simplify the tax code while making it more progressive.

  • The ultimate tax reform; how the government would collect taxes if it were a fee for service business.

  • The useful functions performed by the old money rich, why simplistic soak-the-rich policies backfire.

  • The parasitic functions performed by the very rich, where soaking the rich can actually improve the economy.

And if I get enough readership to this blog, I might just throw in some more goodies such as:

  • How to turn the tide away from wage serfdom.

  • How to productively reduce the U.S. trade deficit.

  • How to tame the frantic consumer society, so we can all get a taste of the relaxed lifestyle of the old money rich.

  • How more people can get rich.

That last one might have surprised you. This is not your typical socialist or progressive blog. This is a liberal blog, in the oldest sense of the word. It is a blog for liberty and against aristocracy. Too many people forget that Adam Smith was a liberal, both in the sense of liberty and in the modern sense of being progressive. He wrote on how to reduce the rate of profit and increase wage rates. Most modern liberals have forgotten these lessons, and today unwittingly side with the modern aristocrats. I hope to clear up this confusion and help create a society that is neither socialist nor capitalist in the current sense.

I want to help create a society where it is easier to get rich, but harder to stay rich.


Tomasz said...

Great topics. Looking forward to further exploration of what you outline above. I, like you, and many others feel that we are on the cusp of the emergence of a new political ideology. You are working to define that. I will try to contribute when I can.

GeoPorcupine said...

I want to help create a society where it is easier to get rich, but harder to stay rich.

Have you looked into Georgism?

Matt Stone said...

Dude those pictures are flawless. Excellent use of the sweater. Mean it.

CSM said...

GeoPorcupine: yes, I have. Will cover it a bit later.

Matt: thanks!

Tomasz: Further exploration coming slowly. Recovering from a move.

Anonymous said...

You could have explained yourself in one or two paragraphs, not impressed. That big money must have not sent you to college. No fear, carma will always win in the end, 70 years from now nobody will remember this nor you!
Free your mind and your ass will follow.