Going Galt: The American Dream?

When I was a junior in high school I took third year Latin from Coach Suddarth.   He had a sign that hung from his door with three words in bold type: 


DEATH  
TAXES
SUDDARTH


That sign was on the outside of his door.
 And for two years prior, myself and fellow Latin students walked by it every day.  For us it was true, and a with very clear psychological goal. Stressing the inevitable. But we got through it (some better than others). And although I have experienced enough loss of friends and family to know that life is fragile and temporary, and can be gone in an instant, I haven't yet faced my own inevitable death (obviously).


But taxes... taxes come every year. And it is that time of year. So, I've been thinking a lot about taxes lately. Specifically our federal income tax. How does our tax code work? What are other options? Are they better than our current system? And more importantly who thinks so, and why?


Those are a lot of questions. I'm not going to answer them all. I do however want to start with a quick run down of a fundamental issue: The ethical question of "to tax, or not to tax"
I'll leave that to one of my favorite jurists, Oliver Wendell Holmes, Jr. "Taxes are the price of civilization"
Or put another way, "taxes are justified as they fund activities that are necessary and beneficial to society."
If you disagree, you probably are looking for a for-profit political movement.


Of course we can debate what actually constitutes "neccesary" and "beneficial".
And we'd be here all day. 


So let's move on to discuss our system (in brief) and other options.
Our tax system is a progressive tax on income. That's right, I said progressive. If you haven't already closed the page in terror, then Glenn Beck hasn't brainwashed you yet. A progressive tax structure is one in which an individual or family's tax liability as a fraction of income rises with income. Exactly how progressive and whether or not it has become more or less progressive is a topic for another time, although I do suggest you check out that last link in detail.  Suffice it to say, I like progressive taxes, so I am in favor of some form of progressive income tax brackets.


But there are proponents of alternatives. The Flat Tax and the FAIR Tax both have quite a few supporters. However, both of these proposals are highly regressive.


Whether it be education, transportation, military, welfare, grants, subsidies, disease control, or any of the other numerous functions that government has done for the public interest, there is hardly a single person of any income level who hasn't utilized a public resource. And ultimately, i believe that "[t]he rich should pay more taxes, because the rich get more from the government."


"This is all well and good, but Jesum Crow Justin, what does this have to do with going Galt?"  is what you're probably asking yourself right about now. 


Well I'll tell you.  
 I'm suggesting that, ultimately, 'going Galt' is the American Dream. 


Lemme explain.
Many across the political spectrum would agree that to some degree, capitalism is an integral part of freedom, and a key part of the Protestant work ethic that is emblematic of American exceptionalism. Hard work, entrepreneurial spirit, and fiscal reward have all worked together to make America great.


So, please, don't let your head explode, there is nothing contradictory in my belief in the graduated income tax system as well as the values of individualism and hard work.


Capitalism works.


In fact capitalism works so well that people can amass gigantic sums of money. Become uber-wealthy. Not many can, and many of those are born into wealth to start. And the wealthier they get, the more they get taxed under a progressive tax system (although not like it used to be).  So, as Rand asks, what is their incentive to stay? 


 I was having this very discussion with a friend with education and experience in emergency medicine. We were talking about the effect on doctors' salaries if health care reform were to pass. He made the argument that if health care reform passes many doctors will quit, or go Galt, if you will. I made the counter claim that (if the doctors are truly in a financial position to retire) this would create a need for doctors. Providing more jobs for young professionals trying to advance into the field. I do, after all, believe in the law of supply and demand.


So what, if as the wealthy threaten, that they really will go Galt? I say let 'em! We have an unemployment problem in this country that I bet could be improved by a few good job openings!


And think about those uber-wealthy who could go the "full Galt".  They could go to their own personal "Galt Gulch", buy a private island, or private compound in some country that doesn't have  tax laws to bother them. And watch, as they redistribute their wealth in parts of the world that desperately need it through their spending.


To all those who worry about losing the most talented and skilled people, don't. We'll keep all those people who really believe in hard work and innovation for the betterment of society. We might lose the Steve Forbes 's of our country, but keep the Bill Gates's. 


So, there you go, the American dream. Make so much you can leave and avoid taxes, or be hard working and innovative, patriotic, socially conscious, and you will earn more and pay more, but still keep being super rich in America, the best country in the world.  If you aren't super rich this doesn't effect you, other than that your social services improve. 


But please, please, please, Rush, reconsider, it's patriotic.




"The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. ... It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."
Adam Smith (notorious socialist)