Free Markets, Free People

Richard Thaler


Premise check – who has first claim to your earnings?

Richard Thaler, a professor of economics and behavioral science at the Booth School of Business at the Univ. of Chicago, writes a justification in the NY Times for increasing taxes on the rich.

It’s a curious effort. To end up where Thaler does, the premise one must use is “other’s have more of a claim on the money of those earning $250,000 than they do”. If you believe that, then it is easy to buy into the subsequent arguments Thaler makes in the article. For instance:

There is another possible argument for including the rich in these tax cuts, one based on “fairness.” By this reasoning, the wealthy are entitled to low tax rates because they have temporarily had them, and it would now be unfair to take them back.

But by that same argument, unemployment insurance should never expire, and every day should be your birthday. “Temporary” has no meaning if it bestows a permanent right.

The question comes down to whether we want a society in which the rich take an ever-increasing share of the pie, or prefer to return to conditions that allow all classes to anticipate an increasing standard of living.

Per Thaler, if you earn – note the word, "earn" – more than $250,000, wanting to keep what you earn is the same as desiring "unemployment insurance should never expire". If ever there was an example of a false equivalence, this one takes the cake. Per Thaler, earning equals a hand out.  If however, you believe government has first claim, Thaler’s comparison makes sense.

Note also Thaler’s implicit point that in reality you have no "permanent right" to your own earnings.  The only entity with that “right”, apparently, is government (and that’s primarily because they can enforce their “right” at the point of a gun).  Therefore it claims first right to what you earn and every "right" to arbitrarily decide what is "enough" for you to keep.

If you’re still having a problem understanding the absolutely abhorrent premise under which Thaler and much of the left operate, or believing that’s actually the case, let’s go back in the article to the first paragraph:

Want to give affluent households a present worth $700 billion over the next decade? In a period of high unemployment and fiscal austerity, this idea may seem laughable. Amazingly, though, it is getting traction in Washington.

"Present"? Again, how is it a "present" when the person or persons who earned the money are allowed keep it, unless you believe others have first claim on it?

This is the stealth premise that the left operates on consistently. It underlies every argument made to increase the taxes not only on the rich, but everyone. And that’s what many of those not seeing their tax increased don’t seem to understand when they applaud the class warfare the left uses to demonize the rich. They’re as susceptible to arbitrarily increased taxes once economic conditions improve as the rich are now – and it is all because of this premise which says “government has first claim on your earnings, not you”.

Unfortunately, it is something the GOP either doesn’t understand or is incapable of explaining.   It is a premise which must be challenged and exposed each and every time it is trotted out to substantiate tax increases for anyone.

And yes, that includes the rich.

~McQ