Published in Capitalism Magazine, Nashville Business Journal
[March 1, 2004]
Other People's Wealth Benefits All of Us
By Wayne Dunn
The presidential hopefuls' common promise to "repeal the Bush tax cuts for the wealthy" is the campaign trail one-liner garnering the most empty-headed applause.
It's simply false that only the rich benefit from the tax cuts, as any non-rich person who got money back can attest.
Of course, critics will retort that while some "working Americans" (as if the rich don't work) may indeed gain a little from the tax relief, it's nonetheless unfair because the "wealthy few" gain a lot.
Imagine if the police told victims to come reclaim their stolen property. When you recoup your diamond necklace, others begin howling, "Why does she get more than we do? It's not fair! The rich are getting richer!"
Just as I'm not damaged if police manage to recover my neighbor's stolen goods but not mine, neither am I damaged when other people-- even rich people-- get tax cuts. What hurts me is the original theft-- even if the robber gives what he stole to the poor, or uses it to spur growth, or whatever. The ends don't justify the means.
Thus conservatives miss the mark when trying to defend tax cuts on the basis of "economic stimulus." Tax cuts are justified not because they boost the economy but because one has a moral right to what one earns. Otherwise the implication is that the individual is nothing but a servant permitted to keep only what earnings his master, the State, deems "helps the economy."
The notion that the road to prosperity is paved with redistributed wealth is as wrong now as when Marx first asserted it. Apart from the immorality of legalized theft, wealth redistribution stems from the fallacy that only by personally possessing money can one benefit from it. The fact is, however, that we all profit tremendously from the riches of others.
To illustrate, few of us own a supermarket or the capital to build one. Yet we all benefit from those who possessed the capital to launch supermarket chains. At our convenience and for the tiniest fraction of what it costs to run such enterprises, we can simply pop in the store and buy what we need, bearing none of the stockholders' risks or executives' headaches.
But what if the wealth-redistributers had their druthers? What if whenever someone amassed capital, the government dispersed it through the population?
Let's say you manage to squirrel away $100,000 for the purpose of starting a business. But then the government steps in and divides your money "fairly" among 270 million Americans. We'd each get less than a cent, and no one would benefit from the goods or services your company could have offered.
Even divvying up Bill Gates' billions would amount to only a couple of hundred dollars each. Then what? Then we'd have destroyed one of the world's premier wealth-creating engines for the sake of a little spending money. And even if some amazingly industrious individual transformed his cut of the loot into a multi-million dollar success story, how long before his wealth was grabbed, too?
Without capital and the liberty to deploy it, none of the great industries that make life livable would exist. And though such a prospect may make one wing of the Democratic party salivate--the environmentalists-- I doubt it'd be very pleasing to the "little guy" the rest of the Democrats constantly insist they're looking out for.
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© COPYRIGHT 2004 by Wayne Dunn