Donald's Flagpole

Robert Boysen stands up for those oppressed multi-millionaires and against increasing their income tax rates in a recent Letter to the Editor. "Paying an extra $50K or so in taxes will not affect a multi-millionaire's lifestyle. Spending more than a mere few hundred thousand dollars per year on personal consumption is an extremely rare thing among multi-millionaires." I beg to differ, Robert. Have you seen the prices for Lamborghinis lately? That's $200K right there and a guy has still got to eat.

Robert continues, "So what does the multi-millionaire do with the rest of his income? Why, he invests it of course. Paying an extra $50K in taxes will just decrease what he will invest. So the salient question is not one of fairness, but who will better utilize the $50K - the multi-millionaire or the government? Is it better for our society for this money to be invested by thousands of successful people motivated by economic success or spent by our legislators who are chiefly motivated by political appearances?"

What a pretty picture! Millionaires are freed from that onerous tax yoke. Investments soar. Steel mills and auto assembly plants spring up in every neighborhood. Everyone has a good-paying job.

The trouble is that we already tried it and it didn't work out that way. In 1980, the maximum tax rate was 70%. Presidents Reagan, Bush I and Bush II cut it in half to the current 35%. Multi-millionaires had tons more money, and, guess what Robert?, they speculated with it. Either they made scads more money or they went with Bernie Madoff and are in line at the local Food Bank. Regardless, these "thousands of successful people motivated by economic success" made choices that led to the unemployment rate doubling since 1980.

On the bright side, Donald Trump did save enough on taxes that he could go to court and get approval for the tallest flag pole in his gated Florida community. Psychological implications?

Actually, the salient question IS one of fairness, Robert. Far and away, the bulk of Federal outlays go to Social Security, Medicare, and Defense. Let's assume that we don't want Main Street, USA to resemble Mother Teresa's doorstep in Calcutta awash in starving, dying indigent oldsters. Also, unilateral disarmament is probably a bad idea in this dangerous world. The Federal government needs money, so who sends it in on April 15th? Joe Sixpack makes $50 K per year and pays 25% in taxes leaving him with $37.5 K. Reginald Gotbucks makes $1 million and has to get by on a mere $650 K after taxes. Both Joe and Reg pay the same $1 for that McDonald's Value Menu Double Cheeseburger. It's just that Reg can buy 20 times more of them than Joe. After basic living expenses, Reg can afford to toss a few more bucks at Uncle Sam than Joe. It's called progressive taxation. It's also called fairness.

If we're talking major corporation, of course, all bets are off. General Electric made billions in profits last year and paid zero in Federal taxes. The "successful people motivated by economic success" at GE chose to invest their profits in off-shore investments and clever tax lawyers. I guess that is "better for society", Robert.