I was on the Snopyta wrapper for Youtube and saw this Vox video essay, I played it
It’s a rehash of your standard Warren Buffett “I pay lower taxes than my secretary“ argument. The segment features clips of Buffett and a former BlackRock bigwig explaining how they get dividends from their stock holdings, and pay 20% on the income. This is presented as an injustice. If we have any sort of grasp of history, of human nature, and the incentives of the aristocracy, we should be highly skeptical. Why do they want to help us?
How likely is it that Warren Buffett, a man known for ruthlessness, and lust for wealth, has the best interests of the nation, and for the people, in mind, rather than his own? I’d propose it’s more likely that the ultra-rich instead seek to increase the capital gains tax in a way that hits small time rich people harder (the upper middle class). There’s only a few hundred billionaires, but there are millions of millionaires, tens of millions with a few hundred grand from a lifetime of investing.
If the oligarch class had their way, capital markets would be a closed to the general public. If you were not in the “senatorial” class, you wouldn’t be able to buy equity in public companies, but instead would be limited to making loans to banks at negative real interest rates, and spending your income at monopolistic companies owned by the the ultra-rich.
The Scrum for Risk Assets
I’ve proposed in the past that consumerism can be understood as a political weapon. When you over-spend on goods that have poor resale value, or buy unnecessary services at corporations substantially owned by the oligarchy, you reduce your capacity to compete for equity in the very mega corps whom you bought from. This is why Dave Ramsey is “the most dangerous man in America”: he seeks to turn the underclass into equity-holding yeomen, and the upper middle class into minor nobility. Imagine if physicians and middle-managers poured their incomes into Proctor & Gamble instead of new BMWs and second homes.
If you assume a fixed path for nominal national income over an X year period, and a fixed fraction of that income being paid out as corporate profits, the more the oligarchy own equities, the more they own that income stream, the more they “control” the economy. The more “the people” own equities, the more they own that income stream, and recoup some of the profits from their consumerism. It also follows that the higher the rate of investment, the more expensive are investment vehicles, this is why low-risk yield has trended lower for 40 years, the tidal wave of global savings flowing into low risk bonds and bank accounts. We’re all in a scrum for control over the capital stock, only most of us don’t realize it. We’re living and working on a latifundium, only we have the option to buy into the latifudium, which Roman slaves did not. They want to weaken that capacity.
What Buffett is really after is a means of double-taxing the public’s income. First, when they get paid wages via the usual means, and then a second time when the stocks which they bought with their wages, pay them dividends or appreciate in value and are sold. This way the public have less capacity to compete with Buffett for equity in monopolistic corporations. Remember, the pattern in our world is the high-low coalition of the lumpenproletariat and the oligarchy, against the politically disenfranchised, but still in aggregate, wealthy middle. The “middle”, in this case, includes plenty of millionaires. Someone with even $100 million in wealth, can hardly buy legislation in the way a Warren Buffett can, and we’d all be better off if Buffett’s share of the pie were spread out across 10,000 politically impotent rich guys, instead of concentrated in a single powerful equity lord.
If you want to reduce inequality, psyop the public into financial literacy, make them into micro equity lords, don’t double-tax their income.