When famous bank robber Willy Sutton was asked why he robbed banks, he reportedly replied “Because that’s where the money is.” And when our next President, no matter who it is, and Congress try to unscrew this financial mess, they will quickly realize two things:
– It will require a crapload of money.
– Poor people don’t have money
Like a group of Willy Suttons, they will come after the rich because no one else will have any money. The fairness part of the debate will become moot.
The problem is that the rich are the only group powerful enough to stop the government from raising their taxes. So my question to you today is this: What is the best way to confiscate money from the rich?
There must be some way to give the rich a spoonful of sugar to make the medicine go down. Somehow the impression of unfairness has to be mitigated so they comply willingly. Allow me to jump to some bad examples to make the point.
Suppose the next President made the following pitch. “This is a once-in-a-century cash crisis. To get us through, we are going to tax the rich heavily for the next ten years. In return, the rich will each get two votes in every election.”
Now remember that the spoonful of sugar can be more psychological than economical. A double vote is the one sort of thing a rich person can’t already buy. And it wouldn’t have much impact on democracy because there aren’t that many rich people. Everyone gets something. The poor get money, the rich get slightly more influence.
Or suppose the rich were required to fund alternative energy projects directly, and in return get some equity, like a mandatory venture capital model. I would much rather give my money to a specific venture with a tiny chance of payback, as opposed to the general tax fund.
I would also feel okay about a tax increase if 100% of the extra money went to buy healthcare for those who couldn’t afford it, and I knew how many people that was. For example, if I got a tax bill from the government with a specific dollar amount, and next to it an estimate of the number of people it will give healthcare to, I couldn’t feel so bad about it. I’ll only get pissed if my money goes into some general fund to buy bridges to nowhere.
Or suppose Congress makes a deal with the rich, something along the lines of raising their taxes only if the government reforms something in particular that is widely agreed to need reform. I wouldn’t mind paying extra taxes if it inspired the government to be more effective or efficient going forward.
Or how about requiring the rich to buy foreclosed houses, with a requirement that they rent them to others for the next 15 years? The rich can qualify for the lowest loan rates (or pay cash), so the credit problem would be solved. While the rental income wouldn’t cover the loan and other costs, there is some potential that the investment could turn at least neutral when home prices rise in the future. Low income people would get extra places to rent, and rich people wouldn’t feel so screwed if they owned property that had some chance of breaking even. And banks would be solvent.
And suppose you require the rich to install solar panels and other energy solutions to each foreclosed home they purchase, and optionally roll that expense into the mortgage. That would create lots of jobs and reduce national energy consumption at the same time.
In business school we learned that you can usually reach a deal whenever two parties put different values on things. Do you have any better ideas for how the government can confiscate money from the rich and make everyone happy about it?