There’s a popular saying along the lines that “you’ll never get rich off of W-2 income.” The idea there is that absent equity ownership of whatever endeavor you’re part of, your upside is substantially limited.
Please keep the above in mind with Washington Post columnist Catherine Rampell’s commentary about IRS funding top of mind. As readers can likely guess, Rampell desires more funding since “Every dollar available for auditing taxpayers generates many times that amount for government coffers.” Imagine cheering on increased snooping on and harassment of taxpayers. But I digress.
As readers can probably similarly guess, Rampell most desires a better-funded IRS because “revenue collected per audit” is “enormously higher” if the person being snooped on is in the top 0.1 percent. Which is Rampell wasting words.
Yes, there’s a higher return on the proverbial auditing “investment” when it’s someone rich being audited. It’s tautological. The rich, by virtue of being rich, have a lot of money. Frequently they have much more than W-2 wealth. See the opening paragraph. Unknown is why Rampell is so eager to fleece those most likely to have wealth beyond income.
Her zeal implies an odd desire on her part to shrink opportunity. Think about it. The rich, by virtue of being rich, have unspent wealth. The latter is the most important wealth of all simply because short of it being put in coffee cans, unspent wealth exists as investment capital. There are no companies, no jobs, and no advances absent investment. No economic school can evade this basic truth. To innovate, entrepreneurs must have access to capital. To expand, businesses must have access to capital. The rich provide it.
To cheer “enormously higher” tax collection via aggressive IRS audits is for Rampell to cheer enormously lower investment bent on inventing an all-new, and much better, future. Put another way, progress and the opportunity that the latter entails is a remuneration of abstinence. When government takes unspent wealth in order to consume it, the abstinence part doesn’t happen. Only for the news to get worse.
Rampell once again cheers the IRS generating higher taxation “returns” born of much more aggressive policing of those with means. Forget how hideous such an approach to the citizenry is, and forget however briefly the implications of “enormously higher” taxation on those with the most. Think who is empowered.
Indeed, government isn’t just some “other.” Government is populated by people eager to do things with the money in their care. At present, Joe Biden and Chuck Schumer get to have a big say about how taxed wealth is consumed, and probably in ways that please Rampell to varying degrees. True enough, but Kevin McCarthy is Speaker of the House, and he’s a Republican whose hold on the Speaker job is routinely threatened by a Freedom Caucus just looking for an excuse to unseat him. Donald Trump was president before Biden. Think about all this. In calling for a more aggressive of IRS, Rampell is unwittingly calling for the empowerment of individuals she loathes, including the Freedom Caucus, and presidents like Trump. That can’t be, can it?
Probably not. Which speaks to the meaning of libertarianism. To say it’s reflexively anti-government is to miss the point. More than anything, libertarianism is about localizing taxation as much as possible so that people can choose their individual governmental bliss. Maybe a lot, maybe a little, or maybe not much at all.
The underlying desire of limited government is choice. In seeking “enormously higher” tax collection, Rampell is unwittingly cheering for enormously greater force.