Here’s How to Screw the Rich

Eat The RichInteresting points from TechCrunch founder Michael Arrington:

Tax the rich. Those bastards.

I get why people who aren’t rich hate those that are. No one really cares what they have, they only care what they have relative to others. When there is inequality, and there always is, even the hyper intelligent call for a redistribution of wealth. It’s an enduring longing for us as a species, and no evidence to the contrary will convince people it just doesn’t work in any large group.

What I really didn’t understand until recently though is why so many rich Americans seem to loathe their richness as much as everyone else does. Many in Silicon Valley want to tax the rich into the middle class and let government spend and spend and spend. The super rich tech elite flock to Obama, joining in the call to screw the rich as loudly as all the rest.

Then I figured it out. As I wrote then, the super rich won’t mind at all if we “tax the rich” as it’s currently defined. That’s because people who are super rich don’t really pay taxes. They pay taxes on this year’s income, and capital gains on accumulated wealth. But the only “tax” that can ever touch what they’ve already made is inflation.

More from Michael Arrington on TechCrunch

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  • Anonymous

    Tax the rich into the middle class?  Yeah, no.  That’s not how it works.

    Sounds like Michael Arrington knows almost as much about marginal tax rates as he does about technology.

  • jb

    Tax the rich into the middle class?  Yeah, no.  That’s not how it works.

    Sounds like Michael Arrington knows almost as much about marginal tax rates as he does about technology.

    • kristin

      I’m surprised this site re-posted that POS article.

      • jb

        Yeah, sadly I’m not surprised.  

        This site has gotten waaay too literal with the whole “disinfo” concept.

  • kristin

    I’m surprised this site re-posted that POS article.

  • Anonymous

    We’ve always lived in a top down society. Those with the most have the most burden. The only thing new these days is that we have a middle class of inbetween people at all. Used to be you were either poor or rich, no inbetweens, and those rich people paid for everything and were taxed to hell because the government knew they were the only ones with anything in the first place. It’s how Rome operated for one.

  • SF2K01

    We’ve always lived in a top down society. Those with the most have the most burden. The only thing new these days is that we have a middle class of inbetween people at all. Used to be you were either poor or rich, no inbetweens, and those rich people paid for everything and were taxed to hell because the government knew they were the only ones with anything in the first place. It’s how Rome operated for one.

    • jb

      So the slaves of Rome had less of a burden than the ancestral nobility?
      Okay. All y’all suck.

      • Butter Knife

        In terms of taxes, they didn’t pay any… so yes, in that one regard it can be said that Roman slaves has less of a burden than the ancestral nobility.

        If you are one that believes paying taxes is such a terrible thing to be forced to do, then I suppose you might see that as somehow offsetting the rather obvious differences between being a member of the slave class as opposed to the aristocratic class. In that case, I would politely suggest that you go die in a fire so the rest of us don’t have to put up with any more of your mindless Randian bullshit.

      • SF2K01

        As BK mentioned, we’re talking financially and slaves. If we start talking about who works the most for the least reward, well our poor class definitely share that with their slave class and had the most burden in that regard.

    • chinagreenelvis

      When you say, “used to be” in order to refer to ancient civilizations, you lose all credibility.

      • SF2K01

        “Used to be” refers to most civilizations up to and including America, at least during it’s founding. I only mentioned Rome because they had a big habit of just taking rich people’s money when they needed some funding, but I could also have pointed at Britain who did the same thing.

  • Anonymous

    Yeah, sadly I’m not surprised.  

    This site has gotten waaay too literal with the whole “disinfo” concept.

  • Anonymous

    So the slaves of Rome had less of a burden than the ancestral nobility?
    Okay. All y’all suck.

  • Guest

    How many of you even bothered to read the article? It’s obviously in your comments that you did not. Arrington is saying that taxation is not how you get at rich people’s wealth …

    • Rowan Duffy

      Your nick is apt. He was saying that you tax wealth to get at rich peoples wealth, not income.  And he was suggesting that it was a bad idea.  I don’t think it’s very plausible in a climate in which all the politicians are controlled by moneyed interests, but neither would it be a bad thing.  As someone in the comments noted, it’s beyond implausible to think that innovation has anything to do with minute changes in the marginal tax rate.  People invent stuff because they are curious and interested.  Otherwise we clearly would have no mathematicians or physicists – and yet – we do!

  • RedHerring

    How many of you even bothered to read the article? It’s obviously in your comments that you did not. Arrington is saying that taxation is not how you get at rich people’s wealth …

  • pixelbrine2

    What most people don’t understand about the “hyper intelligent” supporting a form of redistribution is that when you understand how money works you understand it is a necessity to redistribute when the scale becomes too unbalanced. 

    Most people think of money in a vacuum, as if money and wealth can grow continuously with no limit. That is simply not true. The concept of money still has to work within the finite structure of resources we have available. When a group of people hoard money they are also hoarding the ability to acquire resources. When the amount of available money for the rest of the population is spread too thin, then, prices must drop on most consumer goods (resources) so people can afford to buy them. Sellers of consumer goods can not make a living only selling to the rich (who often own the goods anyway). They also can not make a living if the profit margin on producing and selling goods is too low. When this happens the only way to allow people to buy goods at a price that will allow for profit is to pump more money into the economy. This is usually done by simply “printing” more money (very little of it is actually printed but the concept is the same). When more money is “printed” the relative value of each dollar goes down (inflation). If you have $100 and it can now buy $95 worth of goods you wont notice as much. On the other hand, if you have 1 Billion and you lose the same 5% purchasing power you have lost 50 Million Dollars of purchasing power, practically over night due to inflation. Raising the top tax rate from 34% to 39% will have only the effect of taxing future income and will (if done properly) slow inflation down and leave much more of the money you already have relatively untouched. Not to mention the fact that if the tax money is used to make life easier on the middle class then they will be able to purchase more goods and the growth in sales for many industries will even offset a portion of the tax increase. There is much more involved, including tax loopholes and the strength of the dollar against foreign currencies but, basically that is the main reason the intelligent rich support slightly higher taxes. (possibly along with a moral component).

  • Anonymous

    What most people don’t understand about the “hyper intelligent” supporting a form of redistribution is that when you understand how money works you understand it is a necessity to redistribute when the scale becomes to unbalanced. 

    Most people think of money in a vacuum, as if money and wealth can grow continuously with no limit. That is simply not true. The concept of money still has to work within the finite structure of resources we have available. When a group of people hoard money they are also hoarding the ability to acquire resources. When the amount of available money for the rest of the population is spread too thin, then, prices must drop on most consumer goods (resources) so people can afford to buy them. Sellers of consumer goods can not make a living only selling to the rich (who often own the goods anyway). They also can not make a living if the profit margin on producing and selling goods is too low. When this happens the only way to allow people to buy goods at a price that will allow for profit is to pump more money into the economy. This is usually done by simply “printing” more money (very little of it is actually printed but the concept is the same). When more money is “printed” the relative value of each dollar goes down (inflation). If you have $100 and it can now buy $95 worth of goods you wont notice as much. On the other hand, if you have 1 Billion and you lose the same 5% purchasing power you have lost 50 Million Dollars of purchasing power, practically over night due to inflation. Raising the top tax rate from 34% to 39% will have only the effect of taxing future income and will (if done properly) slow inflation down and leave much more of the money you already have relatively untouched. Not to mention the fact that if the tax money is used to make life easier on the middle class then they will be able to purchase more goods and the growth in sales for many industries will even offset a portion of the tax increase. There is much more involved, including tax loopholes and the strength of the dollar against foreign currencies but, basically that is the man reason the intelligent rich support slightly higher taxes. (possibly along with a moral component).

  • Mysophobe

    From the article:
    “The super rich love to talk about higher taxes on the rich because it’s a competitive barrier protecting them from competition. If the people making a lot of money today have to pay much higher taxes, they probably won’t ever accumulate enough wealth to be “super rich.””

    This is when I began to suspect that the author was being satirical. Turned out he wasn’t.

  • Mysophobe

    From the article:
    “The super rich love to talk about higher taxes on the rich because it’s a competitive barrier protecting them from competition. If the people making a lot of money today have to pay much higher taxes, they probably won’t ever accumulate enough wealth to be “super rich.””

    This is when I began to suspect that the author was being satirical. Turned out he wasn’t.

  • Mysophobe

    From the article:
    “The super rich love to talk about higher taxes on the rich because it’s a competitive barrier protecting them from competition. If the people making a lot of money today have to pay much higher taxes, they probably won’t ever accumulate enough wealth to be “super rich.””

    This is when I began to suspect that the author was being satirical. Turned out he wasn’t.

  • chinagreenelvis

    When you say, “used to be” in order to refer to ancient civilizations, you lose all credibility.

  • chinagreenelvis

    When you say, “used to be” in order to refer to ancient civilizations, you lose all credibility.

  • chinagreenelvis

    When you say, “used to be” in order to refer to ancient civilizations, you lose all credibility.

  • iPINCH

    use a condom 

  • iPINCH

    use a condom 

  • Jim

    Why not implement a flat tax system!?

    • jb

      Awww.  How cute!

  • Jim

    Why not implement a flat tax system!?

  • Butter Knife

    In terms of taxes, they didn’t pay any… so yes, in that one regard it can be said that Roman slaves has less of a burden than the ancestral nobility.

    If you are one that believes paying taxes is such a terrible thing to be forced to do, then I suppose you might see that as somehow offsetting the rather obvious differences between being a member of the slave class as opposed to the aristocratic class. In that case, I would politely suggest that you go die in a fire so the rest of us don’t have to put up with any more of your mindless Randian bullshit.

  • Anonymous

    “Used to be” refers to most civilizations up to and including America, at least during it’s founding. I only mentioned Rome because they had a big habit of just taking rich people’s money when they needed some funding, but I could also have pointed at Britain who did the same thing.

  • Anonymous

    As BK mentioned, we’re talking financially and slaves. If we start talking about who works the most for the least reward, well our poor class definitely share that with their slave class and had the most burden in that regard.

  • Anonymous

    Awww.  How cute!

  • Fat Cat

    there is no separate agency in the events that happen in my life(world). Its all created by me, is what I keep telling myself.

  • Fat Cat

    there is no separate agency in the events that happen in my life(world). Its all created by me, is what I keep telling myself.

  • Rowan Duffy

    Your nick is apt. He was saying that you tax wealth to get at rich peoples wealth, not income.  And he was suggesting that it was a bad idea.  I don’t think it’s very plausible in a climate in which all the politicians are controlled by moneyed interests, but neither would it be a bad thing.  As someone in the comments noted, it’s beyond implausible to think that innovation has anything to do with minute changes in the marginal tax rate.  People invent stuff because they are curious and interested.  Otherwise we clearly would have no mathematicians or physicists – and yet – we do!

  • http://profiles.yahoo.com/u/5OQFBZ26C3VQ5ONGZGDBDY4BUU Mark A

    The poor don’t hate the rich because they have more. We hate the rich who are greedy, usurp resources, and monopolize the system so that we don’t get paid what our work is worth.

  • http://profiles.yahoo.com/u/5OQFBZ26C3VQ5ONGZGDBDY4BUU Mark A

    The poor don’t hate the rich because they have more. We hate the rich who are greedy, usurp resources, and monopolize the system so that we don’t get paid what our work is worth.

    • Anarchy Pony

      More or less. 

  • Quixelio

    Ayn Randian bullshit. Come on, disinformation, try harder.

  • Quixelio

    Ayn Randian bullshit. Come on, disinformation, try harder.

  • Anonymous

    More or less.