Paul Hsieh, M.D.:
In a widely-read essay at Gawker, Hamilton Nolan recently proposed, “Let’s Have a Maximum Income.” His basic argument was that a $5 million yearly income was the most “that any reasonable person could ask for.” Any income beyond that “far outstrips any measure of fairness.” Hence, the government should confiscate earnings over $5 million, essentially imposing a 100% marginal tax rate. Nolan stated, “[T]here is no good argument as to why anyone needs more than that, while others are suffering in poverty,” and ominously hinted, “A $5 million per year ceiling is, if anything, too generous. But we can always crank it down later.”
Even liberal commentators at The Atlantic and Washington Post have criticized Nolan’s proposal, observing it would eliminate the financial incentive for high-earners to work beyond that $5 million limit and would drive many entrepreneurs out of the United States. But although such economic arguments are correct, they are unlikely to sway those sympathetic to Nolan’s fundamental view of “fairness.” For most people, morality trumps economics. In essence Nolan is arguing, “It’s just plain wrong for someone to make so much money.” The only way to combat Nolan’s notion of “fairness” is to challenge it at the moral — not the economic — level.
It is a perverted sense of fairness when someone like Hamilton Nolan thinks that something should be taken away from someone for the sake of fairness.
Hence, defending Dr. Smith’s high income requires making three points:
1) Dr. Smith earned his money honestly.
Every dollar he made was the result of an honest trade with a woman voluntarily purchasing his medication. No one was compelled to purchase his pill. No one was cheated or defrauded. Genuine fairness would mean letting Dr. Smith keep the money he has earned. Confiscating $195 million of his $200 million annual income would be an act of injustice, not fairness.
(Money gained by theft, fraud, or political cronyism is an entirely different matter. We properly revile con men like Bernie Madoff or politically-connected businessmen who receive government bailouts at taxpayer expense.)
Right on.
We don’t currently live in a capitalistic society, but rather a mixed economy with capitalist and socialist elements. But to the extent capitalism is allowed to operate, the millions of dollars Dr. Smith earns each year is a measure of the value he has created for millions of others.
Bingo! I’ve been saying this for years. The liberals love to talk about how capitalism doesn’t work and that it has failed in this country, but the problem is, what they are calling failed capitalism was never actually capitalism. We haven’t had a true free market or any real semblance of capitalism since long before I, and probably before you reading this were born.
There’s so much more I want to paste here because it is so good, but I am already pushing the limit of reprinting. Just go read it! And be sure to note it’s a two page article and some of the best stuff is on page two!