Happy Big Five-Oh to my own dearly beloved Mrs. Animal!
Here’s a bit of supporting information for something I’ve been saying for decades:
Federal Imperial Programs Keep People Poor. Excerpt:
We ought to be concerned when a segment of the population falls behind. But it turns out that many of the policies Clinton and Sanders demand in the name of helping the less fortunate would very likely make the problem worse.
Clinton plans to raise taxes mostly on the top 1 percent of Americans. Sanders’ plan meanwhile would significantly increase the rates of federal income, payroll, business, and estate taxes, and impose new excise taxes on financial transactions and carbon. He also wants to tax capital gains and dividends at ordinary income rates for households that make over $250,000. Under his plan, all income groups would feel the pinch, though most of the money would come from high-income households.
But the candidates’ ambitions may not produce the benefits they expect. As the liberal Tax Policy Center notes, for example, Sanders’ “proposals would raise taxes on work, saving, and investment, in some cases to rates well beyond recent historical experience in the U.S.”
Increasing taxes on savings and investments has the unfortunate effect of hurting poor people while rich folks benefit. That’s because when you raise taxes on something, you usually get less of it. When fewer people are willing to save or invest their money, it reduces the capital stock (that is, the amount of factories and equipment available to workers). This makes people less productive over time—imagine trying to do your job without access to a computer!—which eventually depresses wages. And since there’s now less capital, the return on what capital remains increases. As Andrew Lundeen from the Tax Foundation notes, the result is that “wage earners make less and capital owners make more.” Stated otherwise, workers’ mobility goes down and inequality goes up.
First up, let me reiterate my usual position that inequality of wealth and/or income is not a bad thing; quite the opposite, it’s an inescapable consequence of a free society. Enforced equality is incompatible with liberty; the only equality to which a libertarian society should aspire is equal protection under the law.
Or, as I’m fond of saying, what government does for anyone, it should do for everyone, or it should do for no one.
But back to leftie policies on poverty: To say that the Left’s war on poverty has been a failure is a massive understatement. We declared a “War on Poverty” in the 1960s; it has been fifty years, and poverty is winning. But it’s a feature, not a bug, of the WoP that it increases government dependency – thus ensuring a permanent constituency for the Left.
We, as a nation, should stop worrying about poverty, and instead worry about opportunity.