I’ve read John Tamny’s Book Popular Economics, and his articles at Real Clear Markets, such as this one: To Redistribute Jordan Spieth’s Wealth, Let Him Keep It
What? The best way to redistribute the wealth of a wealthy person is to him them keep it?
Yes, but you might think that’s crazy. No, the most profound truths are usually counter intuitive. Prepare for war in order to have peace, is another example that is not readily apparent but is profoundly true. The perfect is the enemy of the good, is another one.
Allowing the wealthy to make their own decisions on how to spread their wealth around is equally profound because it is the only way to keep the government from destroying the engines of wealth creation. Voluntary transactions among people are also deeply more ethical and moral than government force because they are more efficient and provide fewer opportunities for graft. That’s why politicians and accomplished bureaucrats don’t like the idea.
Let’s say you won the lottery to the tune of a couple of million dollars. You’d have to share your winnings with the Federal government that will take about 40% of it. State government will likely take another healthy chunk.This will please the class warriors’ concerns over income inequality who no doubt believe that stripping you of a large part of new found wealth will help to “spread the wealth.”
John Tamny, author of a new book Popular Economics and editor of Real Clear Markets, says that a better way to spread the wealth would be to let you keep your lottery winnings. He writes of Golfer Jordan Spieth after he won $1.8 Million in the 70th Master Golf Tournament:
High levels of taxation on property and income are frequently justified by the [purely] emotional … presumption that the world around us is made better when politicians work to “spread the wealth,” or design the tax code to keep big fortunes from becoming too large or concentrated. The positives of such a view are debatable, but whether true or not is to plainly miss the point. If wealth redistribution is truly the goal, then the ideal scenario would be one in which Spieth holds on to as much of his Masters paycheck as possible.
Assuming what seems observably untrue, that Spieth is a wasteful, prodigal spender, wealth redistributors should seemingly rejoice such a scenario. Spieth could quickly spend the portion of the winnings he keeps on private jets, hotels, cars, and booze, and per the alleged Keynesian multiplier, expand the economy through aggressive consumption. Even better, the money wouldn’t have to sit in Washington in wait of politicians to vote on its final destination.
To see why it’s important to remember that there’s no such thing as idle wealth. Applied to Spieth, unless he intends to stuff his Masters winnings under a mattress, the $1.8 million he earned will quickly migrate to the hands of many people not named Jordan Spieth, and who are not nearly as rich as he is.
Best of all, and if polling data are to be believed, a scenario whereby Spieth is allowed to hold onto his wealth should please Americans of all political stripes. While Americans are divided politically, they’re united in their dislike of Congress. If so, it seems Americans would be much more sanguine about Spieth redistributing his wealth through market forces over the more forceful kind in which John Boehner and Nancy Pelosi dispose of his earnings.
Obama infamously said to Joe the Plumber during the 2008 campaign, “I believe everyone is better off if we spread the wealth around.” Actually, that statement is false on its face. Not everybody is better off. It may be true that those who receive a bit of the wealth through government redistribution are somewhat better off when they get a share without doing anything to earn it, but the person who earned it and has it taken from him is decidedly not better off.
When taxes are lower and market forces are allowed to work, the wealth is spread more efficiently, not to mention more ethically. It’s better for the long term health and happiness of those on the receiving end when they are afforded the opportunity to work and earn the piece they get. It’s also a win-win because Jordan Spieth is also better off by keeping his winnings and making his own decisions of how to spend his money on his own wants and needs, and in his case especially, how and how much to give away to charitable causes. Mr. Spieth is well known for his charitable giving. Most of the wealthy are.
For anyone who has any doubts about the superiority of charity over government force as a way to help the poor can consult a plethora of books and studies on the subject. A no better place to start is Tocqueville’s Memoir on Pauperism (1848).