“There is no error so monstrous that it fails to find defenders among the ablest men.”
Let me first say that I’ve been a long-time fan of Ben Stein as an actor, author, and commentator. I admire his entrepreneurial skills in both the academic (he holds a law and economics degree from ivy-league schools) and the entertainment worlds. His credentials as a conservative are strong in his defense of life, liberty and the pursuit of happiness.
But nobody is perfect, and in the case of Ben Stein, he has recently strayed from sound economic thinking in his ill-conceived and unrelenting attack on the rich and his recommendation that the wealthy pay a lot more in taxes.
It’s always amazing to me how wealthy men (whether Warren Buffett or Ben Stein) suddenly think the “rich aren’t paying their fair share” once they become multi-millionaires or, in the case of Buffett, multi-billionaires. They act like they must now speak out for the entire class of rich people, and make them feel guilty for spending too much, or not doing enough for their country.
It all started two years ago in a New York Times column, “You’re Rich? Terrific. Now Pay Up” (May 7, 2006), where Ben Stein suddenly had a revelation in his first-class seat and limo that “the rich are paying the lowest taxes in 60 years.” Stein is especially unset about “the stunning underpayment of military men and women and the staggering budget deficits” and the “so many unmet social needs.” The solution? Not cutting wasteful spending, but raise taxes on the rich.
Ben Stein: Spokesman for Republicans for Obama?
Now, two years later, he’s still ranting and raving about the rich not paying enough. Last week on Fox he urged Congress to pass a surtax on anyone earning more than $2 million. “How many BMWs can they buy?” he asks.
Has Ben Stein become the modern-day Thorsten Veblen? The spokesman for “Republicans for Obama”? Have his years living in Beverly Hills converted him to the Hollywood crowd?
Economic Lesson #1: A Tax on the Rich is a Tax on Capital Investment
Ben Stein should spend more time reading sound economics books like "The Law" by Frederic Bastiat, "Economics in One Lesson" by Henry Hazlitt, or my own "Economic Logic." He is so wrong-headed on this tax issue that it’s hard to know where to start. For of all, wealthy people don’t simply engage in conspicuous consumption. They are, in fact, the nation’s number one class of savers and investors in this country.
Ben Stein should never forget a vital Econ 101 lesson: A tax on the wealthy is a tax on capital investment. How many times do wealthy people have to sell stock or take money out of their savings account to pay their federal and state taxes? Every year billions of dollars are drained from the private sector to pay for bloated, inefficient government programs.
That’s money that could productively be used elsewhere for benefit to private enterprise and other good causes.
As a rich person myself, I resent Ben Stein or Warren Buffett speaking on my behalf. And Ben Stein is wrong. I pay more than my fair share in taxes. I pay hundreds of thousands of dollars to Uncle Sam every year, and every year this incredible black hole eliminates my surplus income. Because I sent so much to Washington, it leaves me with little funds left over for investing in good job-creating businesses, giving to good causes (charities, churches, and free-market think tanks), or even hiring the unemployed to work on my lawn. I’d love to give more to the Cato Institute, the Reason Foundation, or Heritage Foundation, but I can’t. All my surplus income has gone to Washington!
I sense some personal hypocrisy in Ben Stein and Warren Buffett’s attack on the rich. I wonder: if they think the rich should pay more, why don’t they voluntarily send in a check for a million dollars or more to the U. S. Treasury? In the case of Warren Buffett, since he advocates a federal estate tax, why doesn’t he write in his will a donation of $1 billion to the Federal government? Or, in the case of Ben Stein, why doesn’t he write a check for $1 million to the US Army to increase military pay?
I’ll tell you why they don’t. Because they know, like me, that they can put the money to better use themselves in their own causes.
Is Ben Stein listening? Anyone? Anyone?