Taxing the rich is probably the most successful political battle cry of all time. The rich make up a small percentage of the population, and that battle cry can therefore galvanize the vast majority of potential voters in any election. It’s simple mathematics. However, the question is, although it works well as a campaign slogan, would it actually work as a significant contribution to socio-economic improvements? I think not.
I would suggest that the tax laws could be used in a far more productive way than simply taxing the rich. I would further suggest that that route is a waste of time and effort, in terms of any real gains for society.
There are two factors here that contribute to my statement: The first is that the amount of money actually raised by taxing the rich is insignificant, when measured against an overall government budget, especially when you factor in the costs of accountants and lawyers to actually get at that money. And, second, the amount raised would almost certainly be frittered away, and lost, in the overall picture of tax revenues and their use. There are many other factors as well, but these two alone would make the whole exercise a waste of time and effort. Yes, it might send a message that rich individuals and large corporations have to contribute a fair share to the improvement of society but, I suggest, there are far more productive ways of doing that while actually registering some significant gains.
I admit I would be taking away the liberal politicians’ most potent slogans, but one less, non-productive, slogan would be a blessing among the enormous piles of lies and false-promises that accompany all elections.
I am suggesting that we could use the threat of the tax laws to force rich people, and large corporations, to invest heavily in their communities, whether that community be the town where they’re located, their home country, the countries where they have a presence, and/or the world community. They could even be forced into coalitions with other groups and governments to have an even bigger effect. I might add that the brand-new international agreement on a minimum corporate tax of 15% is a good start, but even that will inevitably be frittered away.
The threats of the Internal Revenue Service in the U.S., and the tax authorities in almost every other country, are probably the most potent forces for change in the world. Everyone is afraid of them. Presidents and Prime Ministers don’t even come close to generating that level of fear among the population, although dictators may. Why not use that fear-power for direct positive change.
I read recently about the contribution of the Hershey Chocolate Company/Family in the town named after them in the U.S. A fully-funded school that provides everything for under-privileged children from kindergarten through high school. I’m sure this is by no means a unique example of the “rich” using their wealth for social improvement, but there are a multitude of other rich entities that contribute nothing, or virtually nothing. And, using the tax laws to force them, they could become involved in any number of development projects from building roads and bridges to exploring space, and supporting the revitalization of education systems in all countries, including the rich ones, as well as the poor ones: The U.S. education system is badly broken, is based on a flawed concept and is a detriment to the country, for example. (See other blogs I have written).
A new slogan from the tax authorities might say, “Prove to us that you are annually making a significant contribution to society (numbers and percentages of your wealth on a government developed sliding scale) in a documented and valuable way (defined by society, not just politicians) and we will not tax that portion of your income/wealth. Don’t do that, and we’ll tax you 100% on that sliding scale.
Once established as a system, it would be much easier to administer than trying to collect tax money from the rich and, far more importantly, it would produce significant, direct, change. It would also make heroes out of everyone, including the rich. Food for thought……and comment.