Apparently, a group of wealthy Americans thinks extending the so-called Bush tax cuts is a bad idea. Calling themselves, ready, “Patriotic Millionaires for Fiscal Strength,” they have written an open letter to the President pleading for tax rates to increase on January 1 for individuals earning more than one million dollars per year.
These so-called patriots assert, “We don’t need more tax cuts, and we understand that cutting our taxes will increase the deficit and the debt burden carried by other taxpayers. The country needs to meet its financial obligations in a just and responsible way.” If this group of “patriots” feels so strongly they should pay more federal taxes, then they can have their accountants calculate their tax liability at the higher rates and send in the additional taxes to the IRS. The U.S. Treasury will gladly accept their money. Will the higher taxes lower the deficit? Probably not, because the big government members of Congress want the federal government to spend more to “stimulate” the economy rather than pay down the national debt.
Wealthy individuals are smart. They earn more than the rest of their fellow human beings because they are tops in their fields. However, when it comes to public policy many of them have embraced big government ideas, supporting the redistribution of income and wealth. In many ways, they are some of our society’s biggest supporters of collectivism. In New Jersey, former U.S. Senator and former Governor Jon Corzine and current U.S. Senator Frank Lautenberg are more than “limousine liberals,” they epitomize a segment of society– wealthy leftists–whose members’ ideology triumphs self interest.
Leftists, whether they are millionaire patriots, academics or suburbanites, have never learned sound economics. If they understood how wealth is created, they would not be calling for higher taxes but supporting much lower taxes, especially on capital. As Ludwig von Mises wrote: “All that good government can do to improve the material well-being of the masses is to establish and to preserve an institutional setting in which there are no obstacles to the progressive accumulation of new capital and its utilization for the improvement of technical methods of production.”
Capital goods are essential for higher living standards. The businesspersons and investment managers on the millionaire patriots list should know that better than anyone else should. Government does not create wealth; it redistributes it and destroys it through inflation, taxation, and endless wars.
If the patriotic millionaires want to make America’s economy stronger, reduce the deficit, and increase living standards of the masses, they should be calling for the phasing out of the welfare-warfare state. Instead, these millionaires are part of the problem, because they support the status quo, the federal government’s Ponzi schemes—Social Security and Medicare–overbearing regulations, the Federal Reserve’s legalized counterfeiting, and probably the overseas American empire.
The federal government’s fiscal house will be in order when Congress only spends money that the Constitution authorizes under Article I, Section 8, the Fed stops running the printing presses, and the military-industrial complex is reigned in. In the meantime, forget what the patriotic millionaires have to say about taxes and spending. Their public policy IQ is in the double digits.