Saturday, November 01, 2008

Why the Really Rich Love Socialists

Of course the really wealthy have political power and they use it to keep their taxes down.

Chicago Boyz » Blog Archive » Why the Really Rich Love Socialists
This article [h/t 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.

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