You may have read about Redskins owner Dan Snyder’s recent purchase of a superyacht. Yes, there are such beasts — presumably larger and more luxurious than your average yacht. This one certainly qualifies: it includes a certified IMAX movie theater, a helipad, four VIP suites and a gym. Sticker price: $100 million.
Predictably, rhetorical spitballs came raining down from the bleachers (or end zone, if you will). Said reviews were not the usual “cultural appropriation/insensitive” indictment lodged by those for whom “Redskins” remains a racist term. Rather, this was all about Snyder’s alleged conspicuous consumption. How dare he purchase a luxury good of such high value?!
The first political spitball was thrown from (you guessed it) senator and presidential candidate Elizabeth Warren. The lady from Massachusetts used the news to promote her proposed 2 percent surcharge on personal fortunes over $50 million. For those of you new to class warfare economics, this would be an additional tariff tacked onto taxes previously paid.
Just in case the voters misread the specific retributive nature of her point, Warren observed that the additional revenue could be used to fund “yacht-less Americans struggling with student loans.” The forlorn yacht-less would then presumably get onboard (excuse the pun) with the Warren for president effort.
A majority of Americans might be sympathetic to the proposed surcharge. Some would especially enjoy shoving it to the yacht-owning crowd. After all, the additional revenue would just be chump change to the super-duper rich. Guys like Snyder wouldn’t miss it, right?
This is the redistributionist mindset: tax those that have for as much as you can — for as long as you can — in as many ways as you can — and damn the consequences. It’s only fair…
Others have a different takeaway. Theirs is not a Pavlovian antipathy toward wealth — even super wealth, where legally earned. These then are the capitalists, ever-ready to pursue success and the money that comes with it. Such marketeers help to create and perpetuate the formerly popular American dream: that innovation and hard work will lead to ever-increasing standards of living; that upward mobility will guarantee you a better life than your parents and grandparents.
Few believed there was anything inherently immoral about the ultimate goal. Back in the day, this narrative was passed from generation to generation and even taught on our college campuses!
Back to the emotion-based ways and means of the readily offended. They are resentful of great wealth and the lifestyle it affords. Per this worldview, nobody “deserves” to make over a certain amount of annual income. In the estimation of progressivism’s super-charged but never contemplative leader, Alexandria Ocasio-Cortez, that number is approximately $10 million. The magic threshold may be more or less in the views of other progressives, but the point remains: it is government’s moral obligation to step in and confiscate at a particular but ever-changing and arbitrary price point. Market capitalism must recede to considerations of equity and fairness. Get used to it.
Far from the madding D.C. crowd, there is a distinctly different reaction to such views. I refer to the well-demonstrated elevated levels of “wealth flight” from high to low tax states. Indeed, the reality of transient wealth is precisely why blue state governors were dead-set against the recently passed federal tax reform bill’s capping of the state deduction at $10,000.
Suddenly, the true burden of confiscatory state taxes was illuminated for all to see. It was not a pretty sight. The bottom line: exorbitant taxes encourage the wealthy to exit (their state or even their country) stage left. Gaping budget shortfalls often follow — as does lots of finger pointing.
A final note on basic economic lessons circa 1990. Those of you of a certain age will recall the budget reconciliation act of that year contained a so-called luxury tax on yachts, private planes and expensive cars. The proposal was accompanied by the typical class warfare rhetoric we see today and reflected above. But the initiative failed miserably, causing widespread layoffs in the yacht industry in particular. Here, working class/laborer types who were intended to be the political beneficiaries of the tax ended up paying the steepest price. A Democratic Congress was forced to repeal the wildly unpopular tax in 1993. The laws of supply and demand had yet again been honored.
Of course, all of the foregoing is Economics 101 for those who pay attention to such things. If, however, you are not into the “crush ‘em/bury ‘em” economic angst of the left or the basic market economics of the right, try this one on for size: it’s nobody’s business what Dan Snyder does with his money. Can I hear an “Amen!”
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