Sunday, November 6, 2011

A Mystery Solved (Maybe...)

Lately a political kerfuffle has been making the rounds which is really quite old -- if leftists believe that the wealthy should be taxed at a higher rate for the purposes of charitable acts of government or for some public good, why do they not voluntarily pay higher taxes themselves?  OK, it has not been all that lately;  I admit that I am very late to the table to comment on this.  In its most recent incantation, which was actually a few months ago, one multi-billionaire Warren Buffet asked why it was that he should pay a lower tax rate than his own secretary, and more recently one B. H. Obama made a similar remark that 'people like him' might ought to fork over more.

I really tire of these kinds of discussions, mostly because they are always so riddled with rhetoric and disingenuousness, but a flurry of commentary on some economics blogs has actually treated it with some seriousness.  A post at Free Advice got me thinking more seriously about the question than the the usual yelping of 'hypocrite! hypocrite!'  That analysis has never set well with me, and apparently also not with others.  But what is one to think of the situation, if he is to treat it rationally rather than rhetorically and really understand it?

My first instinct was that, even if one does not agree with these sentiments or behavior and detects a whiff of incoherence, it is not reasonable to expect 'consistency' in this exact context.  The leftist is expressing a sentiment about a hypothetical world, about how it 'ought' to be, and by an unspoken extension asserting how he would act in it, then being asked to act consistently with that notion in the actual world.  But the hypothetical is not the actual, so logically it is not realistic to expect 'consistency' between the two any more than it is to expect 'consistency' in a captain navigating his ship on calm seas versus in the middle of a hurricane.  The two might coincide, but it is not reasonable to expect that they must of necessity.  If the difference -- the hurricane -- impinges directly or indirectly on the captain's objectives, it is perfectly rational that he should change his plans. It seems to me reasonable to expect consistency within arguments that concern comparable situations, and between arguments and actions concerned with real situations as they actually are, but not arguments about hypothetical situations or situations different from those presupposed by the arguments.  If the leftists in question had advocated the higher taxes, and then having gotten their way and not paid them -- now that would be inconsistent, and hypocrisy.

I thought that I had settled the question for myself, but it kept nagging me, and I realized that my response, while true, was trivial, and I hadn't actually found the thing that really mattered -- namely, what caused the discrepancy, and whether or not it was legitimate.   Was there a difference between the situations that the tax advocate could point to to justify his actions?  What, apart from the stated reasons and rhetoric, which are mostly uninteresting to me, underlies this tendency to state things for which there is an obvious retort, and for which one will so obviously be accused of inconsistency in word and deed?

I trust that for most readers I have asked something which sounds rather na├»ve and infantile.   But it is too easy to chalk such things up to greed, posturing, disingenuousness, etc.  Perhaps it is -- but perhaps there is much more to it to understand.  This type of rhetorical behavior has long fascinated me.  For example, the amount of time, emotion, and effort invested in the spinning up of plausible deniability has long baffled me, especially in cases where it is quite obvious that one is lying.  Why would, for example, Iran's Ahmadinejad bother with plausible sounding excuses for Iran's nuke program?  At some point he is going to have the nuke -- and then what?  Everyone pretty well knows he is lying now, and they will surely know when he has the thing.  If they don't know Iran has the bomb, the bomb does Iran no good.  In either event, he will be found out someday -- but no doubt, on that day, he will again hedge and backfill! 

Why not just tell baldfaced lies from the beginning, and give a big middle-finger when it's said and done and nobody can do a thing about it?  That's what I would do.  If I'm going to do something dishonest, why bother with pretense?  If it is dishonest, it is dishonest, and no amount of dissembling on something like that is going to fool anyone worth fooling.  And why would the rest of the world care if his assertions made any sense or not, or bother investigating them, or any such political thing, rather than answering the question straightforwardly and directly for themselves, and blowing the thing up or not as they saw fit? 

I'm not trying to advocate a policy here -- I am probably the last person who should ever be considered for the post of diplomat and do not pretend that I would be be able to handle it any better than the people who are doing so presently.  I am also a lousy poker player and do not understand the popular infatuation with it.  It would not surprise me to learn that I am perfectly tone deaf with this sort of thing, or perhaps that I am capable of far greater evil than even these types, because in this situation, I would simply say whatever it was that I though most efficacious, plausible deniability two sheets to the wind. I don't care. But I don't see the use or the point of all the posturing and maneuvering on something so straightforward -- except that all of humanity seems to hang on this ability to produce plausible sounding utterances that one can point to in the wake of what are obvious deceptions and misdeeds, and say "see, I never actually said anything that wasn't technically true."  What in the world does it matter if or when thousands or millions of people are dead, and why invest so much in the charade?  Will it not be patently obvious that you are a liar, and is anyone really going to trust you anymore when it is all said and done, in either event?

Anyway, it doesn't make any sense to me, but I think that this time I have found something worth thinking about in this situation. 

I see two possibilities -- either the tax advocate is being disingenuous, or he is being sincere.  If he is merely disingenuous, and would not pay 'his share' of tax even if he had his way, there is nothing more to say.  But if he is sincere in his desire for higher taxes -- even on himself -- and in demurring from paying higher taxes now for reasons that he either can, or cannot, or will not articulate, then I think there is something here to ponder.

If he sincerely would pay more if everybody else did, or at least if all other wealthy persons did, I think that it says something important -- that his income qua income, is not actually the issue.  Now, it is true that the situation is not an exact parallel, in that the tax advocate is not giving up the same stream of consumption in both high- and low-tax situations, because the change in income distributions would change the price structure in unpredictable ways.  It is impossible to know what the actual change in lifestyle would be.  However, though Warren Buffet surely understands this, a dope like Obama and most other such personalities probably does not, so I think that it is a safe assumption that, in fact, they are accepting of such a change as tolerable to the pursuit of their ideal.  Which -- and I will be perfectly honest about this -- at least taken in isolation, to my eyes pays them a sincere compliment.

No rotten eggs yet, please.  I'm not quite finished.

But if they do not cling to their wealth in the high-tax situation, why cling to the income under the low-tax regime -- as, obviously, they are?  If I try to imagine what economics looks like to one like Obama, I think I see my answer.  No, I'm not going to try to channel everything about the man, just take a stab on a single phenomenon.

In Obama's world and most of those who think like him, if the millionaires are taxed, and the tax paid out through whatever channels he imagines they will, what he supposes will happen very generally is that the income distribution will narrow, with lower incomes brought up and higher incomes brought down in some proportional fashion.  Which is, of course, his goal.  But -- and this is the important part -- he does not see any changing of places.  If, however, he were to give up some substantial portion of his own income without a similar commitment of others, his own position in the distribution would fall relative to them.  This, I think, is the place to look for my answer.

But if his income means nothing or very little to him as a means for securing consumption, then why cling to his relative position?  Because his position on the distribution means something very different to him, and this is the thing he wants to remain secure.

For most high income earners -- and Obama is certainly to be numbered one of these -- income isn't usually valued so much as income anyway.  People who are driven by the desire of fantastic levels of consumption usually do not become wealthy.  They usually become poor.  For the wealthy, even a large change of income will probably not affect their lifestyle much, if at all, because every dollar earned beyond that which secures their chosen level of expenditure is useless in this regard.  Warren Buffet is rather famous for continuing to reside in a relatively humble household despite being one of the wealthiest men ever to live.  To men such as he, it has all become marginal -- in these terms.

It is not marginal in others, however.  For the very wealthy, other things which may be secured by wealth have usually become the desired ends, most often status, influence over others and the world around them, fame, power, or even merely the securing of even more wealth.  Often, even among the not-so-wealthy, one's accumulated possessions begin to be identified with the actual self.  To relinquish income is to relinquish these kinds of things, some of which really do become part of a very vicious zero sum game -- most notably power and status.

If such men were to relinquish wealth disproportionately when others were not required to do the same -- especially their peers -- they would sink in exactly the pursuit which they have made their life's focus.  And really, would one expect a man who cared little for his own status to pursue the office of President, at least successfully, given the present day and age, or to become an aggressive titan of finance?

It is entirely possible that such men really do have good intentions, and that they think their own influence on the world so positive that they dare not relinquish any of it for fear of being overtaken by rivals.  In fact, I suspect that that is at least partially the case for the vast majority, and it is entirely understandable to me that they refuse to 'let go' without some commitment from others, but would do so with good grace given the right assurances.  They are perfectly open to an absolute diminution of 'the self' for the right cause, just not a relative one.  In that way, it is somewhat analogous to an arms race.  We are talking about very driven men who have made their pursuits something of an obsession.  Their achievements did not come easily, at least in their own eyes, and who does not take his own beliefs seriously?

But on the other hand, we are also talking about the satisfaction of egalitarian sentiments!  So maybe they really are hypocrites, but on a completely different level, and in a way probably almost no one is conscious of.  In any event, I leave it to the reader to decide for himself whether or not this 'difference' in situations legitimizes the decision of wealthy tax advocates not to donate their funds to the Treasury voluntarily.  But I do not think they can be accused of ungenerosity, disingenuousness, or greed in the normal sense of the words.  I suspect that money qua money has ceased to be any more of an issue for them than for most other people, and perhaps they may even be on a better footing than many who do not advocate for higher taxes.

However, some other issue certainly has, and perhaps Thorstein Veblen had things right even in ways I did not want to give him credit for.  Given the above, it is as unsurprising to me that the wealthy might prove to be the least 'generous' in percentage terms as it is that the most generous should be found to be lower- to middle- income 'conservatives' -- who are really probably more religious people than actual ideological conservatives -- for whom presumably worldly status might mean relatively less. 

Or perhaps the latter only appear to despise worldly status and accumulation because they see their acts of charity gaining them otherworldly status?  But supposing they did, would it actually be bad?

I don't know, I don't know...  It is all to guess and to speak in generalities.  Only God knows the soul...

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