December 24, 2013

"Inequality: Government Is a Perp, Not a Bystander"

That's the title of Dean Baker's piece posted by a leftist think tank (HT: Instapundit). Public choice theory is not mentioned; unsurprisingly, people with political axes to grind are not enthusiastic about clear-eyed exploration of their motivations.

Also unmentioned is my notion about taxes and inequality:
From time to time I point out that, given a graduated income tax, income inequality maximizes the government’s revenue, all else being equal. In that sense, notwithstanding protestations to the contrary, income inequality is in the government’s interest—and the politicians know it.
(Otoh, that comment's concern about a VAT proved unfounded. So far.)

IMHO Baker is correct to write that:
Inequality did not just happen, it was deliberately engineered through a whole range of policies intended to redistribute income upward.
But he doesn't go far enough.

(When billionaires ostentatiously call for their taxes to be raised---but don't make donations to the Treasury---, I don't think they expect to lose money in risk-adjusted terms. IMO they are proposing a quid pro quo whereby the government protects their wealth from the vagaries of a market economy.)

Addendum 20140103: Roger Simon chimes in with some good lines, but IMO he doesn't go far enough. Per this post, Simon's "Soros Socialists" get a net benefit from the policies they espouse.

Is this a step toward full socialism? Maybe, maybe not; not immediately, anyway. Even if the statist crocodile eats the sorosians last, for the time being it protects them from attack via the free markets---and fattens them up.

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