The Israel Advocacy Movement claims that all 3 of the above could use some personal financial reform. Is this a cheap shot at the three young, up and coming Congresswomen who seem to wield inordinate power within the Democratic Party? Perhaps it is. But what is not at all surprising is the leftist knee-jerk attack on the rich and predictable call for a steep raise in taxes on the very rich. This sounds great to masses of people who are struggling. But just as high taxes drive companies and individuals to other states, high federal taxes drive multi-millionaires to move their companies and investments out of the country.
Tax The Rich Ideology
There is no question that people who have been blessed with much more financial success should do their part to help the poor and less fortunate. But the question is how best to do this in order to maximize the resources of the wealthy. The idea of offering major tax incentives on donations to non-profit organizations as a way to induce wealthy people to move themselves down from a high tax bracket to a medium tax bracket. Put simply, if a wealthy multimillionaire profits 10 million dollars in one year and he is taxed at 70% on his profits, he will need to give the federal government 7 million dollars. If instead the multi-millionaire is told that if he donates 2 million dollars to charity, then he will only need to pay 40% taxes, he will be much more comfortable with this idea. Then the federal government will receive 4 million dollars, the charities will receive 2 million dollars, and the multi-millionaire will receive high standing in their community due to charities that he has donated to. This will induce the wealthy person to stay put and continue to “give back” to their community.
So, the cynic will say, why should the wealthy person be allowed to hold on to so much of the wealth and decide for themselves how to apportion the wealth. Well this is where “The Squad” and the likes of Obama are completely wrong and where the wealthy people are right. Obama famously said that if a person profits enormously, it wasn’t really them who brought in the wealth – it was actually the federal government who had an enormous part in that happening because of the roads, infrastructure, etc.. that enabled that person. That is a complete exaggeration of the importance of the federal government. The truth is that indeed the wealthy person deserves the bulk of the credit and therefore the choice as to what to do with the wealth that has accrued.
So, taxing the rich makes non-rich people feel good. But it is both wrong economically and unjust to the wealthy person who earned the money and deserves to choose how to “give back.”