05 February 2016
The Wealth Cap
Fact: The rich be getting richer, everyone from the middle on down be getting poorer, capital be concentrating at the top, all that. It's just so much easier for rich people to skate on forward. Most of the things that make the real money are pay to play: the courts, starting a business, investing, etc. Money makes more money with, comparatively speaking, little or no effort. This is allowable (and arguably necessary in many contexts) – but only up to a point. There is a line.
As with most things in life, the solution can be found in the world of basketball. Specifically the NBA, specifically the maximum contract.
The NBA's max contract is, most Americans would seem to agree if they thought about it at all, communism. It's anti-capitalist, anti-freedom, the nanny state stepping in and dictating pricing to the free market. How can restricting the right of Lebron James or whoever to make what he is obviously worth be justified?
And yet, rarely if ever is the argument against lifting the max salary heard, and when raised it is almost always quickly dismissed. Because, one, the rule makes things so much better for so many people (arguably it makes the whole league possible) that this good far outweighs the 'injury' to the elite dude, who is in any case still well-off relative to his peers and absolutely on easy street from the perspective of most fans; and two, the maximum salary is set so high that no reasonable person can complain without sounding like a total jerk. Never mind how much income is actually generated by superstar-guy, he is being paid $25 million a year to play his favorite game. (And of course makes much more on top of this from endorsements, etc.) Complaining about the limit on his salary can only hurt his popularity/marketability and thus produces negative returns.
The point is that far from ruining the league, this concession of the top individuals to the greater good enriches the whole system for everybody. The NBA has never been stronger. Popularity, and entry-level salaries, are at all-time highs. The max salary lifts all boats; it still allows elites to exist, but it pushes more of the rewards further down stream, enriching the overall ‘ecosystem’ so that not only are more people enriched, but the lives of the rich are themselves made richer, in the best sense of that word.
If it works for the NBA, it will work for the Our Great Nation. Which brings me to the Wealth Cap.
We are borrowing the max salary concept, but it doesn't apply to income, it applies to accrued wealth. You can only pile up so much and then that's it, when you max out, you're cut off from gaining anything beyond that.
It could be as low as $50 million, certainly a reasonable endowment for any reasonable person (and arguably obscene in itself given the standard of living 'enjoyed' by most of humanity) but I think we can go a little higher, let's say it's $125 million to start, we can adjust on the fly as necessary. Once you have $125 million, you pay 100% tax on anything above that and are not allowed to make any further income until your balances fall below the max figure.
"But why are you targeting the wealthy? They earned their money! It isn’t fair!"
Ah-hah! So there is such a thing as fairness – when you're on the short end of the spit.
First of all, we are not going to take anything from anybody below the $125 million figure (other than the 9% tax everyone pays on income between 43K and 250K, and 14% on income including investment income above that). If the balance of anybody's accounts adds up to anything over the max, that money goes to a pool, perhaps they can pick from a list of 100s of civic or charitable organizations dedicated to meeting the needs and enriching the lives of the less (coughs slightly) well-endowed.
Yes, the government will confiscate any wealth over the cap and this will inevitably cause some howling, particularly since those ‘suffering’ will be those who can most afford to howl. But the point is that as in the NBA, the max figure is high enough that anyone complaining about it obviously has mental problems. If $25 million per year is not enough to convince you to play professional basketball, you just sound like a greedy moron with no perspective on how most people live. Likewise, if $125 million is not enough for you to do anything your little heart desires … and the fact that you are not allowed to have more than that makes you feel targeted, oppressed, etc. … well seriously you are dangerously lacking perspective. More importantly, I think I can get at least 60% on my side who have no sympathy for you.
Freedom? Citizens will still enjoy all of the same freedoms currently available – except in those rare instances when accrued wealth eclipses the max figure. After that, the only freedom removed is the freedom to make more money. Which you don't/won't need anyway, because you already have 125 million dollars.
People: If you have $125 million dollars then you have enough to do anything that any reasonable person might want to do, any time you want to do it, for the rest of your life. (Except gambling I suppose, but I'm calling any gambling losses above say a couple hundred K unreasonable.)
If you have $125 million dollars, why are you even trying to get more? For what?
Seriously, someone please explain to me the injury of being cut off from making further money at $125 million dollars.
This is not persecution, it’s called stopping a madman. We do it all the time.
Hey hundred and whatever millionaire: Think it through, figure out what (if anything) will make you happy, and start heading in that direction. You have enough money, so stop thinking about making money. Let someone else belly up to the trough.
And look: here is a study actually supports (with real science) the idea that once you have enough you will never enjoy getting more as much as you think you will.
The major complaints generally offered against such a scheme boil down to the following: Give the money to whom? Give it the lazy stinkin dirty poor, what have they done to earn it? Government will just waste it. We all know how government wastes money hahaha. To which I respond, Well then take over the government and run it properly – put up or shut up.
And the other objection this will inevitably raise is "Rich people will hide their money to avoid this so it's pointless", to which the obvious answer is simply, Enforce the law. Make cheating this system the highest crime, and enforce it with gruesome penalties. Is that so hard?
I can see that many are nodding but some are spluttering, so one final question for people who think this is a bad idea: Would such a law affect your life positively or negatively? What would society stand to gain, and what would we stand to lose?
Please take a few moments to consider why you feel the way you do about this.
We'll be right back.