It is high time that federal and state governments finish eliminating all taxes on wealthy persons. Perhaps 90% of this has been completed in recent decades, but remaining taxes on income, capital gains, realty, and estates still cause our most prestigious and most honored people and corporations enormous personal anguish, not to mention accounting and legal fees.
The elimination of these taxes would not only ease the minds of our most productive persons, but would also achieve desirable policy goals. Tax considerations would no longer distort their allocations of capital. Estate planning would no longer be contorted to minimize inheritance taxes. Corporate compensation could take more productive forms if freed from the contortions required for the sake of tax minimization. And real property could be put to owners’ creative uses, instead of being forced into intensive use. Another benefit would be a reduction of enforcement expense, or at least a reallocation letting agents of the fisc pursue more easily adjudged tax cheats. Moreover, the elimination of taxes on the wealthy would reduce crime the same way legalizing marijuana does.
Some might object that the elimination of these taxes would starve governments of the money they need to operate effectively. At the moment, however, it is almost entirely the wealthy who block all tax increases. If they are freed from taxes, opposition to tax increases would sharply diminish and necessary increases could finally take place.
Another objection is that the elimination of taxes, especially estate taxes, would cement the upper class into place. But that is unlikely, given the high-spending propensities of rich children and the opportunities they have to lose money on investments. Even if it does take place, what exactly is wrong with that? England has enjoyed the noblesse oblige of its wealthy for centuries. If people become secure in their possessions, they can more readily afford to be generous and kind to others.
A third objection would be that eliminating taxes might eliminate charitable donations from the wealthy, and many good causes depend on those donations. But to a significant extent the private donations that benefit from tax favors reflect the particular interests of their donors, rather than public needs. If charitable organizations were to lose their private support, they would have to pick up public support, which would only be available for organizations truly operating in the public interest.
In conclusion, let us eliminate all taxes on our wealthy persons. Everyone would benefit.