Carol Platt Liebau: Wealth and Envy

Friday, June 10, 2005

Wealth and Envy

Liberal Jonathan Chait insists he doesn't envy the rich -- he just wants to tax them (more). And doubtless this reaction is precisely the editors hoped for when The New York Times decided to run a series of pieces on class in America.

Even setting aside the fact that the "super-rich" (referred to by the article linked above) is only about 1/1000 of the U.S. population, Chait dodges inconvenient questions by setting up straw men:

Whenever you broach such inconvenient facts [about rising income inequality], conservatives invariably have three pat replies. One is to accuse you of envying the rich and/or wanting to kill them. Another is to suggest you want to turn the United States into a clone of some god-awful country . . .. The third is to insist that it's good for everybody when the country gets less equal.

Chait's piece is distinguished by its ignorance of conservative argument. I have known many, many conservatives over the years -- and have never heard anyone accuse redistributionists of wanting to kill rich people, or insist that it's great for everyone when the country gets less equal. There is, in my view, a well-justified suspicion that liberals like Chait would be pleased if this country began to resemble some of the more redistributionist European or Scandinavian societies -- but, in fairness, shouldn't Chait concede that this suspicion is justified, given the reverence in which liberals seem to hold these countries compared to their critical attitudes toward the United States?

But even more, Chait never addresses the real objection to those who would impose punitive tax rates even on the very rich. Let's be clear here -- I'm no fan of conspicuous consumption, having, for example, been less than impressed to read that Donald Trump's wife wore a $300,000 wedding dress less than half an hour. The same amount of money, after all, could have made a big difference, even divided between a number of poor families.

But as gauche and ill-judged as the Trump wedding dress spending decision may have been, it did have the effect of employing a number of seamstresses for a period of time. And moreover, if you've got the money, you've got the right to waste it even in ridiculous ways (although you shouldn't expect boatloads of admiration when you do).

One question people like Chait never answer: How much taxing is enough? That is, what tax rate is too high, as a moral matter, even when imposed on no one but the super-rich? Is it 50%, 60%, 70%? Isn't there some point when we decide that a certain tax level is immorally confiscatory, whomever it's imposed on? (For liberals, there doesn't seem to be).

For these purposes, there's not really even an argument for distinguishing between earned and inheirited wealth (although earned wealth is certainly more worthy of admiration, especially in the era of Paris Hilton). After all, someone had to do something to earn the money in the first place, and many are motivated by the aspiration to leave something of value to their heirs.

No, the heirs didn't do anything to deserve their fortune, necessarily. But models didn't do anything to deserve the beauty that wins them money and renown. So should they be taxed at a higher rate than risk-taking entrepreneurs like Bill Gates? And do we really want the government in the business of deciding who deserves what, and drawing the tax lines accordingly?

If Jonathan Chait had answered these questions -- instead of setting up straw men and taking the easy cheap shots -- well, that would have have been a piece worth reading.


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