Tuesday, October 05, 2004

Why The Rich Oppose Tax Cuts

The current tax code is structured in a progressive fashion where the bulk of government income comes from the top earners. One would expect that rich people would object to bearing the burden, but a lot of rich folks are unconcerned or actively resist tax cuts. Why?

It could be that the rich are innately more altruistic. This may or may not be true, but it seems inconsistent with other traits we associate with rich people.

There is a significant difference between earning money and having money. It should be noted that earnings are often taxed at a much higher rate than possessions. High tax rates build a hedge around old money. Thus the oligarch affects a populism to tax his new-money competitors and use the funds to buy votes from the oligarch's clients.

This helps explain why we see two multimillionaires presenting themselves to the public as populists.

No comments: