Wealth and freedom
Regarding "Trickle-down's 'vicious circle' " (Letter of the Day, May 20):
Chip Thomas' diatribe is so fraught with errors, misconceptions and falsehoods that I hardly know where to begin. I'll start with the assertion that "there is a limit to the amount of wealth any society can produce" and "the world's resources, which make wealth possible, are finite." As witnessed by the success of companies like Apple and Microsoft, the only limits of wealth production are in the minds of those who don't produce but look upon with avarice the achievements of others. The Soviet Union and Africa have more natural resources than the United States. Why, then, are we far wealthier? The creation of wealth has far more to do with freedom than resources. When China loosened its grip on its markets and let entrepreneurs do their thing, their wealth increased tenfold, and close to 400 million citizens moved into the middle-class.
How have tax laws been manipulated by the wealthy? The current administration is doing everything in its power to increase the tax bite with countless regulations and new czars, and our economy is still headed over a cliff. Now we need a "wealth tax"? Whatever that means. This thinking is that the more I succeed, the more you fail. In fact, the more I succeed, the more everyone around me succeeds — the vendors I use, the people I hire, the support industries that sprout around me ad infinitum. This is how an economy works.
Man up, put away the petty jealousy and thank the good Lord for the opportunities you have. Look at the immigrants who risk everything they have to come here and are successful. Freedom works, period.
Benefits and resources
Regarding "Trickle-down's 'vicious circle' ":
First of all, if you are employed by someone who is richer than you, the wealth is already "trickling down." It does not necessitate that the rich person must become less rich.
Thomas' second misconception is that the amount of wealth in a society is a fixed amount, or a "zero-sum game." It is not. Wealth is created and destroyed every day. If I take some sand and use it to produce silicon wafers, and then someone else uses those to create semiconductors, we have combined our skills to create wealth. This is an oversimplification, but it happens thousands of times over throughout all industries. Likewise, if a house is burned down, wealth is destroyed.
Thomas also asserts that the rich can only become richer at the expense of everyone else. This is false, as explained by the economist Adam Smith in "The Wealth of Nations." A voluntary, informed transaction, free of coercion or fraud, benefits both buyer and seller. Each person gets something they value more in exchange for something they value less; otherwise, the transaction would not occur.
Finally, Thomas advocates more taxes to transfer the property of the most productive members of society in the private sector to the public-sector bureaucrats in the least productive parts of society. The resources that aren't wasted in growing government departments may be used to fund a mediocre school, or they may be used to bomb a country in a covert military operation. We have relatively little say in the matter, but in either case, it's been demonstrated that the state doesn't allocate resources well, and I don't believe its actions merit an increase in pay.
'Carrying the rest of us'
I'll start with the most obvious: "There is a limit to the amount of wealth any society can produce." If that were true, how is it that our GNP grows? Right now it is sluggish at best, but not that long ago our economy was chugging along at a brisk pace. Entrepreneurs were taking risks, starting businesses, working long hours. As their businesses grew, they hired people, who earned money and spent it at other businesses and paid taxes. That is the way wealth is created.
Mark Zuckerberg is a great example. This young man used his education and creativity to start a business from nothing, and it blossomed. According to Thomas, "the more wealth a select few have, the less there is for everyone else." If he is right, someone else must have suffered a big loss when Zuckerberg got rich.
What do wealthy people do with their money? It isn't stuffed in a mattress. It is being used by others in the form of home mortgages, business loans, etc. It is being donated to charities and funding charitable foundations. It is circulating through the economy, creating a larger tax base for the government.
There are many other reasons why liberal/progressive thinking is flawed, but here is one we don't hear voiced: A "ninety-nine percenter" has a job and pays taxes — say, $5,000 a year. For that amount the government provides him with certain services. A "one-percenter" may have a job, own a business or get income purely from investments and pays $500,000 a year in taxes. His investments help create more jobs, thus more taxable income for the government, but he gets the same government services. How is he not paying his "fair share?"
Let's not fall into the trap that it is always the other guy who is at fault. The bottom line is those who take advantage of getting an education, then work hard, take risks and succeed — something we all have the opportunity to do — are carrying the rest of us on their backs, not holding us down.