While trying to make the case for keeping taxes on the rich as low as possible, Reihan Salam reminds us who's really important:
The U.S. is a country rich in amenities that Dubai, Doha, and Singapore can't really match. So many of the ultrarich will pay a premium to live here, just as wealthy individuals pay a premium to live in California or Paris. But how big a premium will they pay? And how long will our edge in amenities last?
It's useful to assume that the answer is not that big and not that long. Because if we're wrong, a trickle of adventure-seeking emigrants could become a cascade of our best and brightest.
Ultrarich = best and brightest. "Conservatism" in a nutshell.
Those were two separate sentences.
And I don’t think I said all of our “best and brightest” will leave. I also think there’s tremendous heterogenity — many smart people are uninterested in making money relative to other alternatives, though they might also want to emigrate for a variety of reasons.
I’m intrigued to hear that you consider my views representative of the conservative mainstream. I’d be very happy to hear that’s true.
Hope you have a great day.
Those were two separate sentences.
undoubtedly true.
And I don’t think I said all of our “best and brightest” will leave.
nor did i say you said “all”. so… ?
I’m intrigued to hear that you consider my views representative of the conservative mainstream. I’d be very happy to hear that’s true.
they — at least what you have in your original post — seem fairly conventionally “conservative” to me. so, i’m happy you’re happy.
let’s all be happy.
The sad thing here is that Reihan’s response illustrates what I’ve observed a lot: the best and brightest “conservatives” (actually, radicals) are not nearly as clever as they think they are.
Does he really thing that a train of thought developed over more than one sentence cannot be recognized as sequence of logically connected statements?
No, in fact, he probably doesn’t — which takes us back to the oft memorialized Jon Stewart Stupid/Evil debate.
Astute observation. Truly, there can be no question of how this man gained his position at the NRO. Join us next week, as Reihan defends his fear mongering assault on health care reform “death panels” by pointing out “I ended the comment with a period, not an exclamation point”.
Many have already emigrated, on paper if not in fact, by moving their place of residence into tax sheltered bank accounts or moving corporate headquarters into under developed, low taxed third world countries.
You’d have us compete with China and Europe in infrastructure and military spending while competing with Burma and the Cayman Islands in tax rates. Utter madness.
Is Reihan further speaking about America’s finance types when he says “Best and Brightest”? In other words, the guys who got bailed out might one day want to go somewhere with less regulatory control? No problem. See ya.
Reihan conjures up the specter of top marginal rates in the US high enough to scare off the most talented and productive workers without mentioning that a revised and more progressive tax code could (and likely would) add additional brackets well above the current set. Running off to Dubai may be a good option for the super-rich, but how many people making 7 or 8 figure annual incomes really fit this description:
Now I’ve worked in precisely this sector (retail) at multiple different levels, during precisely the time frame under discussion, and I’ve seen the technology driven productivity changes they are talking about up close. But nobody involved was in my experience even close to being the sort of person for whom emigration to Dubai (or similar ports of call) was an option, for any reason, much less to dodge a few extra points of marginal income tax rate.
Reihan is engaging in rhetorical slight of hand here by conflating the economic position and incentives of creative and productive workers on the one hand and top level majority shareholders and C-level officers on the other hand. In doing this he then argues by implication that we stand to lose the productivity gains achieved by making more efficient the labor of the former group if we trespass on the perogatives of the different and much wealthier (and more globally mobile) latter group.
But the upper middle “creative” class and the upper upper “rentier” class, while they may overlap to some degree on their margins (particularly at different points in time in the biography of single individuals), at the macro level they are not the same thing. An indexed progressive tax system may be a blunt instrument, but it is not so blunt that it cannot discriminate between the two.
And as for the potential loss of the “creativity” of the much smaller, much wealthier and more mobile of these two groups, a quick look at the innovations wrought by the members of this group specifically in several of our most innovative and dynamic sectors over the last decade (FIRE, data/telecomm, and energy) does leave one wondering whether a little less creativity and a little more prudence and due diligence coming from this group would have benefited all of us. Mabye this is a group that should not be given all the encouragement to take risks which we can conjure up out of our bag of tax policy tricks, given their track record in the recent past in terms of risk/reward calculation, rational or otherwise.
Reihan, you get credit for responding.
But let’s not forget that taxes are the dues that we pay for the privileges of membership in an organized society. This society has been organized to greatly reward the ultrarich. And America sends the flower of its youth overseas to fight, and sometimes die, to protect that way of life.
America didn’t empty out of the rich in the 50s during times of 90% tax rates on the highest brackets. But that may be because the vestige of a moral compass still existed at the upper echelons.
And if we don’t tax the rich (i.e. the ones with the money), how are we supposed to retain an edge in our amenities? We need their (obvious) surplus to invest in America.
Nice catch. He gets credit for responding, but it’s not really convincing. Okay, let’s say he doesn’t think all of the best and brightest are among the ultrarich. I don’t think you were saying that, anyway. He does correlate them, though, and I think it’s a safe guess he correlates them much more than he should. He seems more honest than many conservatives on his discussion of “Bashing the rich,” but he is still offering a typical conservative line: the rich will (or might) leave if you don’t give them an even more disproportionate share of the wealth. That 7% of wealth that the bottom 80% holds (per William Domhoff) is just so unfair!
I love this right wing cliche that the economically-productive will leave if taxes are raised on the ultra-rich. Where is the evidence that the ultra-rich contribute the most to the economy? If these parasites want to go Galt, let ’em. As De Gaulle said, the cemeteries are full of indispensable men.
Seems that since I am not the best or the brightest I am driving down the average income and thereby reducing the desired infrastructure, maybe Reihan can make an argument that I should be paid to leave.
And Argentina and India in worker’s wages.
TLTIABQ:
So glad to see you write that. I don’t know why I never see this fact mentioned.
Like the mythical primitive culture that has no name for numbers greater than four, our current system basically ends at $250,000. So income statistics treat a person making $300K (not a small amount, granted) on the same level as a CEO who receives $40 million in compensation.
There’s no good reason we can’t impose more divisions in the upper income range. If we get over our $250K fetish, and start talking about taxes on $5 million or $10 million, we get out of “Joe the Plumber” territory and start acknowledging that enormous income disparity exists even in the top quintile.
Reihan,
The conservative attitude is that the rich deserve and earn all they have and that the poor are lazy. Your having said that or not said that doesn’t change reality.
Thanks,
Pauper McLazy
I would agree with TLTIABQ that Reihan is engaging in rhetorical sleight of hand, here, except I don’t think Reihan is doing it consciously.
I was glad to see that cleek had posted about this passage, because I noticed it, too, when Conor Friedersdorf blogged about it at Sully’s. But Friedersdorf didn’t notice the leap from “wealthiest” to “best and brightest”, and I believe that Reihan didn’t, either.
This is an example of a pattern I’m seeing in conservatives and libertarians: they really cannot perceive a difference between “the wealthiest people” and “the best and the brightest, the most productive people”. The idea that the rich might *not* be the best people, that the wealthiest class might be at fault for anything — none of this is plausible enough to stick in their minds. It’s an idea that has no traction for them, and even if you force them to think about it they’ll just slide away mentally.