Wealth Tax Will Not Reduce Inequality

The ignorance of the educated never ceases to amaze. The article by the trio of academics in the Mercury of May 9 advocating a wealth tax to reduce inequality is a case in point.

Inequality is a given in all societies and always has been the case. The idea that equality can be achieved is a pipe dream as history has shown.  Socialism and its extreme variant, communism, coerced millions into equality by denying them freedom. That totalitarian experiment in social engineering produced mass misery and ultimately failed.

Despite that, modern Marx, French economist Thomas Piketty, advocates the redistribution of wealth by means of a wealth tax on the rich in pursuit of equality. Having learned nothing from history, Piketty and his followers propose legislative means to pursue their ideal. What they fail to appreciate is that such measures have two outcomes: they discourage economic growth and promote the flight of capital. That, in turn, exacerbates unemployment, inequality and poverty.

Of course, the big hole in their theory is their silence on how the wealth tax creamed off the rich would actually uplift the poor and reduce inequality. Only by increasing welfare programmes could such funds reach the poor – but at the price of bigger government and increased social dependence on welfare.

The only proven way to address inequality is by stimulating economic growth through tax reduction and deregulation as President Trump has shown in the US where he has reduced unemployment levels to their lowest since 1969.

Excessive wealth is an unavoidable outcome given the reality that human ambition and talent know no equality. Seeking ways to control and to curb that reality, which is what socialism is all about, needs to be resisted and rejected because its consequences are disastrous.

Sent into The Mercury and published, 10 May 2019.

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