Punishing top earners won’t benefit those at the bottom
The economy is a challenging thing to grasp, with all of its numbers clamoring for our attention. To ease the burden, I offer one category of statistics that deserves to be wholly ignored, freeing up brain space for things that really matter: income inequality.
In this age of equality fetishes, where every kid must be equally praised, all grade curves smoothed out and even meager incomes prodded toward homeownership, it would fit that the gap between rich and poor would be a target-rich environment for redistributionists.
But if we are truly interested in doing what is best for the most people, it is time to calm the conniption fits that arise simply because some people have a lot of money and some have very little. It has always been this way. It will always be this way.
We should all care about providing opportunity for those at the lower end of the income ladder to climb upward. But for those obsessing about income inequality, narrowing the gap between the top and bottom levels is the prime directive, whether it means bringing the lower levels up or the upper levels down.
In fact, the preoccupation with income inequality rests on the assumption that punishing the upper-income levels benefits those at the bottom. That craziness is a corollary of the belief that is at the root of the whole phenomenon — that there is a sinister aspect to wealth, that it must be at its root ill-earned through exploitation of lower earners.
This is one of the most poisonous lies in economic thought today, this notion that the mere existence of wealth is evidence of oppression of the masses who are trying to mobilize upward.
It is forwarded by people who do not actually want upward mobility for those at the lowest ends. They favor a constituency of lifelong dependents, kept in food and clothing and shelter with the largess of a government whose power structure they occupy.
The best way to fight poverty — the creation of more opportunity through a thriving free market — involves saddling the wealthy with only a proportional tax bite instead of the confiscatory chomp favored by those who view upper incomes as a deep well to be drained for government programs.
This is not just unwise. It is morally bankrupt, leading to the punishment of success and continued exploitation of the poor. It is based on the absurd notion that the economy is a pie of a fixed size, where if one slice gets larger, it must come at the expense of another slice.
The accurate metaphor is a pie that grows as the economy grows, spurred by economic liberty and risk-takers energized to invest in the best odds for success the free markets can offer.
When those markets are strangled by people consumed with reducing the range between top and bottom earners, it hurts everyone, especially the lower-level folks they say they are trying to help.
When we hear of an area with a narrow income gap, we should hope for additional wealth to boost its upper levels. If we hear of an area with a wide income gap, we should find ways to provide opportunity so the lower echelons may climb most effectively toward the top.
Here’s an even better idea: Since income disparity is completely meaningless, let’s stay focused on ways to encourage all people to achieve wealth, while fighting those who would attack the successful on the phony basis of helping the poor.