In a post at DMI today Amy Traub takes a look at this country's tax policies and finds them, well of course, insufficiently redistributive. The focus of the post is on a NY Times business story about $350 drink minimums at the city's night clubs. The author points out that, the declining tax rates fuels the kind of spending that contributes to the development of an entire class of workers earning their living by catering to the "obscenely wealthy."
Traub finds this disturbing, the idea that "the market itself will redistribute wealth." And she goes on to point out that the author of the story, "to his credit...never quite says that that the market redistributes wealth as effectively as good old progressive taxation." Nor, one might add, as effectively as confiscating the land of kulaks though forced collectivization.
This brings us face to face with the efficacy of the entire redistributive worldview. The fact remains that lowering the tax rates does create wealth and encourages new enterprise. Not all of the excess capital is going to purchase expensive liquor, a great deal of reinvestment is fueling the market growth that, more and more, is helping millions of middle class Americans grow their investments and savings. More capital is going to create new enterprise and the employment that spurs economic growth.
But let's just take the $350 drinks at the city's night life venues. The fact is that this industry alone is generating $700 million a year to the city in tax revenues. It is, as we have pointed out, a $10 billion economic engine that employs 19,000 city residents. These are good jobs, and it is the generation of good jobs that makes this economic system superior to all of those whose basic premises rest on some notion of redistribution.
This does not mean that the lack of affordable health care shouldn't be a concern, or that those of us who support the assumptions of this economic system have a Marie Antoinette attitude. It does mean that we believe strongly that the "throw the baby out with the bath water" economic philosophy of the redistributors is an example of the cure being much worse than the disease.