Capitalism and Socialism
23rd December 2021
Why is socialism growing more powerful in the United States? Because it directly benefits the gentry class: those running the country and those supporting them. This includes not just the political elite, but also the upper-middle-class, credentialed workers who work white-collar jobs – management and technology. The folks who can work remotely and get all their wants and needs delivered to their door.
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Some might say I am nuts. The upper-middle class is the group in the highest tax brackets – the ones on which the burden of paying for government falls upon the most heavily. The working class and poor pay little to no income tax. Except part of that burden is s sleight-of-hand illusion. The top 10% of income earners have many ways of sheltering their income from taxes, which are often entered into the tax code in the interest of “fairness.” (An example is the recent attempt to remove ceilings on SALT tax deductions,) But more than that, those high tax rates are how they maintain their position in society. We do not have wealth taxes. Those who “have theirs” do not get what they do have taxed. They only get taxed on their income. As do their potential competitors.
Those potential competitors are the ones to whom high marginal tax rates are targeted. These are the Horatio Algers of American society. Those that arrive in this country penniless and through hard work, intelligent choices, and a little luck, build a business and amass wealth. But making money takes capital. High tax rates slow the accumulation of capital. Until capital grows to a critical mass, it is difficult to take the risks associated with starting a business unless you are willing to gamble everything on a low-odds effort. High tax rates ensure most of those who could potentially enter the top ten percent age out by the time they get there.
As I have been saying for years.