How Not to Fight the 1%
How Not to Fight the 1%
By Kevin Carson /

In an article that will no doubt make “progressive” hearts go pitty-pat (“The 1% May Be Richer Than You Think, Research Shows,” Bloomberg, August 7), Jeanna Smialek suggests that top 1%’s wealth is far greater even than official statistics indicate – and that because so much of that wealth is hidden in offshore tax havens government efforts to reduce inequality through tax and welfare policy are thwarted.

In the interest of fairness, Smialek quotes Tyler Cowen’s statement that “[p]eople worry about the top one percent too much,” that it doesn’t matter how rich Bill Gates is if “the poor are becoming better off in the process.”

That’s a big load of horse manure. If Gates’s wealth comes from robbing everybody else, then the inequality sure as heck does matter. Everyone else is made worse off than they otherwise would have been — by definition — by the exact amount that Gates robbed them of.

And that’s exactly how Gates got his fortune: By robbing his customers. Absent state-enforced copyright and patent monopolies on Windows, he’d have to make money in the same way a Linux distro does, providing tech support and customization services for software that in itself was free. Let’s be generous and say he might accumulate $10 million. That’s about 1/10,000 of his actual peak fortune of $100 billion. That means all but one hundredth of one percent of Gates’s wealth is stolen.

Now, you might think this strengthens Smialek’s case for better tracking and more progressive taxes on wealth. But in fact it does just the opposite. The only way justice could be done would be for Gates’ loot to be taxed at 99.99%, which would leave him roughly the amount he earned honestly. And the same can be said of any fortune in the hundreds of millions or billions. There’s simply no way to get that rich any way but robbery. But the highest any major Democratic player would tax the ultra-rich is, what, 40%? And that’s before all kinds of deductions and credits they support. I doubt even Elizabeth Warren would support a top marginal rate on billionaires as high as 50%.

And to tax income (including returns on wealth) even that high would require an enormously difficult and expensive enforcement apparatus that would be unsuccessful a lot of the time.

And the smartest part of the plutocracy supports higher marginal tax rates because, as corporate capitalism is structured, they’re the only way to stave off worsening depressions from the chronic tendency of the wealthy to over-save and over-invest, the surplus investment capital on their hands with no profitable outlet driving down the rate of profit, and the idle industrial capacity from aggregate demand shortfalls. That’s why corporate CEOs like Gerard Swope of GE supported the New Deal. The state — their state — was acting to ensure the long-term survival of capitalism and at the same time guarantee that the plutocracy would keep the maximum sustainable portion of their stolen loot. That’s also the motive for “progressive billionaires” like Gates and Warren Buffett.

But bear in mind, again, that all that enormous wealth is achieved through the state — the billionaires’ and corporations’ state. All that wealth comes from rents on state-enforced artificial property rights, artificial scarcities, monopolies, regulatory cartels and entry barriers (except the part that comes from direct taxpayer subsidies).

So for the state to expend enormous resources on tax enforcement to modestly increase taxes on ill-gotten wealth obtained entirely through the state in the first place is a pretty clumsy and indirect way of doing things. And most of the state’s spending enabled by that revenue will be aimed at promoting the pathological economic model by which they got that wealth in the first place: subsidies to car culture and sprawl, subsidies to long-distance shipping and inefficient large-scale production, military spending to utilize surplus industrial capacity and soak up excess capital, the use of “intellectual property” law to reinforce planned obsolescence and waste … not to mention giving the poorest of the poor back a small portion of what was stolen from them to prevent revolution and create aggregate demand to keep the wheels turning.

Why not instead eliminate all the state-enforced monopolies in the first place, and all those other perverse things the state does to help the rich and promote waste and inefficiency? The rich can’t move that stolen loot to tax havens if they never never get the chance to steal it in the first place.

4.3 ·
What's Next
Trending Today
F*ck That: A Guided Meditation for the Realities of Today's World
2 min · 12,673 views today · Just acknowledge that all that sh*t is f*cking b*llshit — you're here now, in this place, with your inner stillness. Take in a deep breath ... now breathe out. Just feel the...
Noam Chomsky Has 'Never Seen Anything Like This'
Chris Hedges · 7,102 views today · Noam Chomsky is America’s greatest intellectual. His massive body of work, which includes nearly 100 books, has for decades deflated and exposed the lies of the power elite...
Your Lifestyle Has Already Been Designed (The Real Reason For The Forty-Hour Workweek)
David Cain · 6,485 views today · Well I’m in the working world again. I’ve found myself a well-paying gig in the engineering industry, and life finally feels like it’s returning to normal after my nine months...
Who I'm Voting For...
3 min · 6,171 views today · Prince Ea announces who he's voting for. It's probably not who you think.
Free Trade Explained In An Excellent Comic
Michael Goodwin, Illustrated by Dan E. Burr · 5,787 views today · The Trans-Pacific Partnership (TPP), Transatlantic Trade and Investment Partnership (TTIP) and Comprehensive Economic and Trade Agreement (CETA) are the latest in a long line...
Open Up - Have the Difficult But Important Conversations With Loved Ones
5 min · 3,296 views today · “The biggest casualty of humanity is the lack of communication, it’s the thing that breaks most relationships. It just feels so much better to talk and get it out.” There is...
25 Mind-Twisting Optical Illusion Paintings by Rob Gonsalves
Dovas · 2,328 views today · The beautiful and mind-bending illusions in Canadian artist Robert Gonsalves’ paintings have a fun way of twisting your perception and causing you to question what in his...
Today I Rise: This Beautiful Short Film Is Like a Love Poem For Your Heart and Soul
4 min · 1,707 views today · "The world is missing what I am ready to give: My Wisdom, My Sweetness, My Love and My hunger for Peace." "Where are you? Where are you, little girl with broken wings but full...
Forget Shorter Showers: Why Personal Change Does Not Equal Political Change (2015)
11 min · 1,667 views today · Would any sane person think dumpster diving would have stopped Hitler, or that composting would have ended slavery or brought about the eight-hour workday; or that chopping...
#Hypernormalisation - Why Heathrow Plan Is Proof We Exist in a Catastrophic Fantasyland
Matthew Adams · 1,569 views today · The British government recently gave the green light for Heathrow airport’s third runway. It was heralded by its supporters as a vital boost for jobs and growth – and proof...
'Maritime Graveyard': 2016 Deadliest Year Ever for Refugees Crossing Mediterranean
Deirdre Fulton · 1,558 views today · "From one death for every 269 arrivals last year, in 2016 the likelihood of dying has spiraled to one in 88," says UNHCR spokesman
What Makes Call-Out Culture So Toxic
Asam Ahmad · 1,497 views today · Call-out culture refers to the tendency among progressives, radicals, activists, and community organizers to publicly name instances or patterns of oppressive behaviour and...
Dinosaur explains Trump policies better than Trump!
8 min · 1,112 views today · Donald Trump is actually the corporate triceratops, Mr. Richfield, from the 90's TV show sitcom, "Dinosaurs". 
The Empire Vs. The People - Police Attack and Arrest Peaceful Protestors at the Dakota Access Pipeline
6 min · 1,007 views today · On October 22, just before dawn, hundreds of people, including many families, gathered and prepared to march toward the Dakota Access pipeline construction site near Standing...
John Lennon's "Imagine," Made Into a Comic Strip
John Lennon. Art by Pablo Stanley · 708 views today · This is easily the best comic strip ever made.  Pabl
Ode to Lesvos
5 min · 677 views today · An inspiring story of a few remarkable heroes on the Island of Lesvos who helped almost half a million refugees in 2015 has been documented in a new short film called Ode to...
The Burden of the New Story
Adebayo Akomolafe · 626 views today · The 'new story' - that longed for milieu when all is right with the world and things are set straight - seems to be taking its sweet time coming. Why?
HyperNormalisation (2016)
161 min · 450 views today · We live in a time of great uncertainty and confusion. Events keep happening that seem inexplicable and out of control. Donald Trump, Brexit, the War in Syria, the endless...
The White Man in That Photo
Riccardo Gazzaniga · 418 views today · Sometimes photographs deceive. Take this one, for example. It represents John Carlos and Tommie Smith’s rebellious gesture the day they won medals for the 200 meters at the...
The Top 100 Documentaries We Can Use to Change the World
Films For Action · 384 views today · A more beautiful, just and sustainable world is possible. Take this library and use it to inspire global change!
Load More
Like us on Facebook?
How Not to Fight the 1%