Tom Ward, editor of The Valley Breeze, is (as the saying goes) a gentleman and a scholar, and an asset to the State of Rhode Island. A recent column of his, however, in which he explains why he, as a “Reagan conservative,” can find common ground with progressives on the matter of taxing the rich seems to me to cede ground without justification. Consider this paragraph:
I also wrote about the young men who formed Snapchat and became billionaires before the age of 25. That wasn’t possible before the internet. And so, progressives rightfully ask “Is it fair for a person who quickly gains a billion dollars to pay the same taxes as the family which makes about $600,000?” This is a fair question. The answer should probably be “no.” And if we are to level a middle-class playing field and help those left behind, we really should be finding some way to get more of that money from those who get rich very quickly.
I’d preface my remarks by wondering why a Reaganite would let his hypothetical progressives get away with the assertion that the two taxpayers “pay the same taxes.” The family making $600,000 would presumably have exemptions that would lower its taxable income below the line at which the 37% rate kicks in. But even if $600,000 were the family’s taxable income, 37% would be $222,000. Meanwhile, the techie with a $1 billion income would pay $370,000,000, or 1,667 times more than the family.
Moving to the key point: As a father of teenagers, I hate Snapchat. If somebody wanted to go after the company for enabling ephemeral child pornography and that sort of thing, I might be receptive. But Tom’s talk of what’s fair brings to mind my response when my teenagers made the same objection to my ban of Snapchat: “Unfair” on what grounds and by whose metrics?
Why is it unfair that those young innovators made a whole lot more money and pay the same tax rate? Did the merely rich family work harder? Perhaps not. Did the family’s breadwinners provide more value to society? We could disagree on subjective grounds, depending what the breadwinners do, but at least by the standard of what society values, it is a tautology to say that they obviously did not.
The other absent question is why it should be government’s role to address this inequity. Let the kids make their billions. If they’re unwise and blow it, then it’s redistributed anyway. If they reinvest it and do something productive, society reaps the reward (again, by society’s own values).
Those two possibilities raise the appropriate response to money-grabbing progressives. If you want to redistribute the billionaires’ wealth, then increase competition, which requires getting government out of the business of judging fairness. It also has the added benefit of keeping the money and power out of progressives’ hands.