Why the Really Rich Love Socialists

From Chicago Boyz - http://chicagoboyz.net [1] This article [h/t [2] Instapundit] shows that the U.S. has a more progressive tax code than the democratic-socialist states of Europe. Such a state of affairs should not come as a surprise. Our own history shows that the very wealthy benefit from leftist policies of high tax rates, “targeted” taxation and industrial policy. The ugly truth is that the really wealthy can manipulate the political system to their own ends better than ordinary people. They can lobby for specific tax breaks that only they can take advantage of. They can get government trade protection for their companies. They can get bailouts. If all else fails, the truly wealthy can simply relocate their wealth into whatever area the government policies du jour make the most profitable. In the extremes, they can simple sit on their wealth and wait for the political winds to change. The history of Europe since WWII has shown that it really pays to be a big company in a socialist country. Socialists like stasis. Socialist politicians like to guarantee jobs. They like predictable tax revenue. To this end they select a handful of major companies and in return for heavy regulation, protect them internal and external competition. The largest companies in Europe are much larger compared to the size of their national economies than are the largest companies in America. The largest companies in Europe also keep their top positions while a great deal of turnover by comparison occurs in American companies. America saw the same thing happen between 1945-1980. At the zenith of the Left’s influence in America the tax code grew so riddled with loopholes and shelters that the wealthiest paid little taxes. For three years in the 1970s, Malcomb Forbs, then the world’s richest man, paid zero income tax. After the Reagan tax reforms, such a thing would be unthinkable today. The Democrats want to put us on a road back to the 1970s when the rich got off scot free, corporations grew fat and lazy behind trade barriers and high taxes, and inflation and deteriorating government services slammed the middle class. It will happen again. The perverse outcomes are guaranteed by the incentive structure built into our political system. Why do we have to go through all that again?