An interesting exchange on Twitter this morning regarding the 70% marginal tax rates proposed by that pretty young Democratic socialist I said I wasn’t going to talk about anymore led to a lot of anti-capitalists crawling out of the woodwork to expose themselves as really shabby economists.
It began with a tweet from RBPundit:
Let's do the math with Serena Williams, shall we @AOC?
She made $18 million.
Tell me why she should be forced to pay $9,319,000 with your new tax. Do it.
She earned $18 million and will only keep $8,681,000.
— RBe (@RBPundit) February 4, 2019
Oh how the wannabe Leninists took joy in explaining how wrong RBPundit was for not understanding it’s a MARGINAL tax rate Ms. Socialism is proposing, a tax only on the portion of income above $10 million.
She pays the 70% on the 8 million over the 10, not the whole 18, but still…
— Morgen Potts (@morgenpotts) February 4, 2019
Duh. Oh but she also has to pay taxes on the amount under the $10 mill, which is what RBPundit’s figures accounted for:
That's exactly how the math works.
She pays about 3.7 million on the first 10 and then 5.6 million on the rest.
That comes out to around 9 million paid in taxes.
You… bumbus. https://t.co/1kqfpIjDkw
— RBe (@RBPundit) February 4, 2019
The entire conversation — it literally went on all day — can be found on RBPundit’s timeline and should be read for a laugh. But one particular tweet was quite revealing:
Because the function of government is to max the welfare of it’s citizens by correcting market failure. And this is done by taxing those who make excessive amounts but still rewarding hard work (income tax is banded!!) and using it to improve roads, education etc.
— diane (@diane47898187) February 4, 2019
This “diane” person apparently actually does believe the function of government is to “max the welfare of it’s [sic] citizens by correcting market failure.” Which is not only not the function of government, it’s not even possible for the government to do it effectively, as has been proven time, after time, after time.
In fact, markets, when left alone and free from manipulation, are self-correcting. And, when they’ve been manipulated, government has already established regulation and enacted legislation to keep barriers to entry at bay. But “diane” doesn’t know that. Which is why the suggestion John Allison (retired chairman and CEO of BB&T, the retired president and CEO of the Cato Institute, and a member of the Job Creators Network), makes in an op-ed in National Review is such a good one: make the moral case for capitalism.
It seems almost a foregone conclusion the last generation wasn’t taught basic economics. And if they were, they are choosing to go the path of their heroine who basically believes facts and data don’t matter if you’re “morally right.”
So Allison suggests the only way to counter an argument that socialism is morally superior is to convince people that it’s actually capitalism lives on the moral high ground.
By merely citing the financial or economic challenges of implementing them, conservatives cede the moral high ground and tacitly accept the Left’s premises.
To win the battle of ideas, conservatives must fight on philosophical grounds, explaining why these policies are immoral. They must make the case based on ethics rather than economics because the latter is downstream from the former. It is only a matter of time before a purely economic or logical argument loses to a moral or emotional one.
In practice this means explaining why the fundamental principle of collectivism underlying these socialist proposals is immoral: It violates the individual rights upon which societal progress and happiness are based. Collectivism is backed by compulsion, where one side wins and the other loses, rather than voluntary trade for mutual benefit.
One of the most compelling moral arguments in favor of the free market is that it is the system most conducive to allowing people to pursue their dreams and creativity, which — for the overwhelming majority of people — manifest themselves through professional work.
It’s a good idea. The worry, of course, is that the minute the kids start to see and believe that capitalism has led to wealth and prosperity for more people than any political system (and that socialism is in fact the ideology of death), the Democratic socialists in this country trying to strip the wealthy of half their earnings will change the rules again.
And they will. But maybe it’s worth a shot in the meantime.