Monday, October 20, 2008

Redistribution of Wealth: what are we really talking about?

I am not exactly sure how I feel about this very concept, and I am even less sure that I will ever have confidence in our government’s ability or capacity to determine exactly how this distribution will go or what standards will be applied. To be perfectly honest, I am not even sure what Obama meant when he stated to “Joe the Plumber” that he wanted to “spread the wealth around”. He further explained: “It's not that I want to punish your success. I just want to make sure that everybody who is behind you, that they've got a chance for success too," Obama responded. "My attitude is that if the economy's good for folks from the bottom up, it's gonna be good for everybody ... I think when you spread the wealth around, it's good for everybody." FoxNews.com 10/13/08

The media push to discredit “Joe the Plumber” after he questioned Sen. Obama on his tax plan notwithstanding, there are elements of the Democratic candidate’s vision that I not only question but find highly disturbing mainly because this whole campaign season has been so long on rhetoric and painfully short on substance – from both sides. I do not pretend to fully understand what an Obama presidency will hope or expect to accomplish with his tax proposals, but I am not comfortable with the socialist elements of these statements he has made.

It is not a bad idea that we are always cognizant of the so-called “bottom rungs” of the economic and financial ladder to ensure that equality of opportunity still exists for these people, that everyone has an equal chance to succeed or to fail. When a political candidate starts talking about methods by which to enforce equality of outcome or attempt to forcibly manipulate that outcome, however, I get nervous because the only way such a standard can come to fruition is by government mandate. It is, as is often said, “taking from the rich and giving to the poor” for no reason other than that they are poor. The only way such a concept can be considered just on any level is if it can be proved that the poor somehow had been unjustly denied a reasonable opportunity.

There will always be disparities between the rich and the poor; this gap existed in this country before our nation was even born. It is a reality that some people enjoy certain advantages for varying reasons that do not necessarily mean that an injustice exists. Essentially it is, very generally speaking, that those who enjoy more success are typically those who take initiative and are willing to take risks, if only conservative but certainly calculated risks.

It is not unreasonable to acknowledge that our economy is as it is because such entrepreneurs exist and are willing to stick their necks out. When they do, the economy begins to hum and we all stand an equal chance to benefit from someone else’s willingness to take a risk by buying into a share of that risk by stock purchase or by employment opportunities which may come as a result. I think, then, that the problem which will always exist is not in how we arrive at a point in which we can take advantage of someone else’s good fortune and, undeniably, some measure of good luck: it is in the opportunity which may not always be “equal” but may exist within a system that is entirely “fair”.

If government is going to take away the incentive for reward which comes as the result of even calculated risk by way of higher tax rates, what incentive is left to risk more and employ more if the government is going to take a bigger bite off the top? All things being equal, the tax liability will be greater while other expenses remain the same. There no longer exists an incentive to reach for more or to put any more at risk than is absolutely necessary just to function. None of this even speaks of those whose own ambition and drive have opened doors for them that other less motivated workers only find closed to them.

I doubt there can ever be a system that is completely fair to everyone. I’m not even sure that such a system can be devised that will be more fair to a greater number. What I am sure of is that if left to the government to take and redistribute, by whatever means, and given the complacency of the average American voter to reelect the same incumbents they cursed only a few days before, there will be left in this nation exactly three classes of persons: the rulers (the elected), the very rich (whose wealth politicians will always depend on), and the rest of us. What takes place after this is anyone’s guess.

1 comment:

Larry B said...

I like your post.

If you are interested in doing some further reading on opinions why wealth redistribution (socialism) won't work particularly well, I would highly recommend reading F. A. Hayek's book - The Fatal Conceit: The Errors of Socialism - if you haven't already read it.