Taxing the 'Rich'

http://www.futureofcapitalism.com/2010/11/taxing-the-rich

An economics professor at Cornell University's Johnson Graduate School of Management, Robert H. Frank, has a column in the Sunday New York Times business section arguing for tax increases. "If the top tax rate were to rise, as scheduled, from 35 percent to 39.5 percent — its level during the Clinton era — many top earners would spend a little less on cars and parties," he writes. "The resulting revenue, however, could do a lot of good for our struggling economy. In the short term, it could be used for grants to state and local governments, which have been forced by their own revenue shortfalls to lay off hundreds of thousands of workers."

There you have it. Professor Frank wants to transfer the money away from the private sector auto workers, wedding bands, and caterers who benefit from spending on "cars and parties," and toward the teachers, police, firemen, and health care workers who benefit from spending by state and local governments. The column doesn't offer any explanation of why government spending is better for the economy than private-sector spending, or why teachers, police, or firefighters deserve the money more than wedding musicians, bartenders, or auto workers, many of whom are already paid less, and have less job security, than the government employees.

At least the column is remarkably straightforward about what is being advocated by those calling for a tax increase — a transfer of wealth from the private-sector workers on whom the money would be spent voluntarily to the public-sector workers on whom the money would be spent by the force of compulsory taxation.

by Ira Stoll  |  Nov 28, 2010 at 9:47 am Related Topics:  Auto Industry, Education, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list