“We want to pay more taxes, and everyone else wants to pay more taxes as well.” — Morris Pearl, Chair, “Patriotic Millionaires”
You might get a kick out of this three-minute video of Steve Moore, a supply-side economist and the founder of the Unleash Prosperity hotline, confronting a group of “patriotic millionaires” who want to impose a 90% marginal tax rate on themselves and other wealthy Americans.
He asked them to sign a personal pledge to voluntarily pay 90% of their income to the government. They refused! Watch their reaction here.
Steve is right. There is nothing keeping these “patriotic millionaires,” which includes Walt Disney Company heiress Abigail Disney, from voluntarily mailing in a check representing 90% of their income to the U.S. Treasury.
How to Give Money to the U.S. Treasury
The U.S. Government actually has a special account to receive “Gifts to the United States.” The Treasury website states:
“Citizens who wish to make a general donation to the U.S. government may send contributions to a specific account called ‘Gifts to the United States.’ This account was established in 1843 to accept gifts, such as bequests, from individuals wishing to express their patriotism to the United States. Money deposited into this account is for general use by the federal government and can be available for budget needs.” See more here.
Note that it specifically refers to “individuals wishing to express their patriotism to the United States.” Surely that would include the “patriotic millionaires” group.
Last year, the monetary value of gifts given totaled over $1 million.
We could call it the “Giving Pledge II.”
Many billionaires, like Warren Buffett and Bill Gates, have signed the “Giving Pledge” to donate half their wealth to charity either during their life or after they die.
There’s no reason why the “patriotic millionaires” couldn’t do the same by donating 90% of their income to the federal government each year.
After all, “The Lord loveth a cheerful giver,” right? Why wait to be forced to pay 90% of your income when you can send in a check right now of your own free will and choice?
And allow others the same privilege — to decide whether to give more to the government, or keep it themselves. It’s the American way.
Yet, I’m not surprised that none of them are willing to do so. They know that when they send their money to the government, two things happen:
First, that money is never coming back.
Which is More Productive? Public or Private Spending?
Second, they know that they can better use the funds than the federal government, which is famous for wasting money in foreign boondoggles and bridges to nowhere.
Warren Buffett has never paid a dividend out of his Berkshire Hathaway Fund. Why not? Because he says he can put that money to better use than most investors.
The same applies to tax revenues. Buffett doesn’t voluntarily pay more than he has to, because he knows he could use the money more productively than any government agent.
Who uses surplus wealth better, the unproductive government or the productive entrepreneur?
Adam Smith said it best in The Wealth of Nations (1776): “Every individual can, in his own situation, judge much better than any statesmen or lawgiver can do for him.”
Will Increased Revenues Reduce the Deficit?
Another mistake the “soak the rich” advocates make is the belief that increased revenue will somehow reduce the deficit. It won’t. Only cutting spending guarantees a reduction in the deficit and national debt. (Sadly, our Congress is unwilling to actually cut spending.)
But raising taxes does not necessarily cut the deficit. If anything, it encourages Congress to spend more.
If you have ever attended a “markup” budget meeting in Congress, you know that the first question the committee chairman asks is, “How much revenue do we expect to come in?” If it goes up from the previous year, the committee members know they have more ability to spend on their pet projects, and more often than not, they spend more money.
In sum, the deficit remains the same, and may even go up.
Numerous empirical studies demonstrate that attempts to reduce fiscal deficits by raising taxes almost always fail because they lead to increased government spending by a factor that outweighs growth in revenues. See “Proposed Tax Increases Will Not Reduce the Deficit” here.
In fact, such a course of action often increases the deficit!
The answer is clear: Taxing the rich is no solution to our financial woes.
New Speakers at FreedomFest
I am happy to announce that Steve Moore will be a keynote speaker at this year’s FreedomFest, which will take place from July 12-15 in Memphis.
Just Confirmed: Michael Shellenberger, author of “San Fransicko: Why Anti-Progressives Ruin Cities” and “Apocalypse Never: Why Environmental Alarmism Hurts Us All” will be part of the Debate of the Century on environmental alarmists who call global warming the “greatest threat of humanity.” Find out the truth at FreedomFest!
Plus, Larry Elder, the famous radio show host and a dynamic speaker, has announced that he is running for president of the United States. He is coming to FreedomFest. Make your plans now to join us.
We should also mention that the financial editors at Eagle Publishing will all be at FreedomFest — Jim Woods, Bryan Perry, myself, George Gilder, Roger Michalski and Paul Dykewicz — as part of our three-day investment conference. Stop by their booth!
Special Discount Code for Skousen CAFE readers: I’ve arranged a special code to get $77 off the registration fee at FreedomFest. Use the code EAGLE77 when you register at www.freedomfest.com. Or call Hayley, at 1-855-850-3733, ext. 201.
Thank you to all those who sent my wife Jo Ann and me congratulations on our 50 years of marriage. It has been a glorious ride.
Mark and Jo Ann entertained Chapman students at their home.
Last week, I invited my Chapman students to our home for a get-together. Every semester, I invite my students to join me at our home in California for sports (volleyball, basketball, cornhole, swimming, etc.), a homecooked meal by Jo Ann, and a philosophical discussion. We had around 25 students come this time and they stayed for another hour — three hours in all. They had a great time. I think it’s important for students to see how a professor lives and works, and enjoy a bit of home while at college. Many students consider it the highlight of the semester.
P.S. Come join me and my Eagle colleagues on an incredible cruise! We set sail on Dec. 4 for 16 days, embarking on a memorable journey that combines fascinating history, vibrant culture and picturesque scenery. Enjoy seminars on the days we are cruising from one destination to another, as well as dinners with members of the Eagle team. Just some of the places we’ll visit are Mexico, Belize, Panama, Ecuador and more! Click here now for all the details.
Good investing, AEIOU,
You Blew It!
The Political NBA is Turning Off Fans, Including Phil Jackson
I stopped watching professional basketball when the NBA started printing “Black Lives Matter” and other political slogans on their courts several years ago.
Don’t they know that Black Lives Matter is a Marxist organization that hates capitalism?
And this is in a sport that is dominated by black players. Racial discrimination is not a problem. The NBA rightly focuses on talent, not race. And as a result, most of the players are black.
Politics has no place in sports. Most of us fans watch sports to get away from work and politics. We see enough divisive politics on the news.
The latest fad is to put slogans on the backs of NBA players, such as “love” and “justice.” How ironic to see NBA players with “love” on their backs shoving an opponent to the ground.
I was glad to see Phil Jackson, the former coach of the Chicago Bulls and one of the winningest coaches in NBA history, reject the current political version of the NBA.
He recently said, “I am not enjoying the game; that’s too bad. There’s a whole generation that doesn’t like the game. No, I don’t [watch basketball].
“All the teams that could qualify went down to Orlando and they had things on their back like ‘Justice’ and a funny thing happened like ‘Justice went to the basket and Equal Opportunity knocked him down’… Some of my grandkids thought it was pretty funny to play up those names; I couldn’t watch that,” Phil said.
He doesn’t like the idea of the league becoming too political for his liking. It started duirng the NBA All-Star Weekend when the league, together with its players, utilized its platform to address a vast array of social issues. But according to Jackson, the NBA would be viewed better if it wasn’t too associated with politics.