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The Peril of Wealth Redistribution


The headline reads, "High Income Taxes in Denmark Worsen a Labor Shortage." The tax rate for people who earn more than $70,000 is 63%, all in the name of shortening the gap between the rich and the poor.

Politicians love wealth redistribution policy because it allows them to become popular by giving away tax revenue to voters. Never mind that such policy never stimulates economic growth. Why would it?

  • Those who know how to make money are discourged to keep making it.
  • Those who don't know how to make money have no incentive to learn how. They learn instead to stand there with their hand out.
Voters who favor candidates who promote wealth redistribution policies are ignorant to their own harm. Wealth redistribution is a diet of junk food: tastes great in the short-run, but it makes you fat and lazy in the long-term. Denmark shows us that with its labor problems due its high tax rates due to "such effective income redistribution that Denmark is the most nearly equal society in the world, in that wealth is more evenly spread than anywhere else." Ah, the joys of wealth equality.

In response to this crisis, Denmark just re-elected right-leaning Prime Minister, Anders Fogh Rasmussen. From Wikipedia:

His government has made a major reform of the structure of government in Denmark, including tough measures designed to limit the number of immigrants coming to Denmark, and freezing the rates of existing taxes, which is 68% at maximum. Taxes have been lowered but the Conservatives repeatedly argue for more tax cuts and a flat tax rate at no higher than 50%. In general, Rasmussen is in favour of deregulation, privatization, and limiting the size of government. His government has also enacted tough measures designed to limit the number of immigrants coming to Denmark, specifically as asylum-seekers or through arranged marriages.
When I watch Hillary's "I'll take away corporate tax breaks and give them to you" commercials airing here in Iowa, it strikes me how harmful she would be as president if she succeeds in her pledge. She says that this policy will create new jobs.

Really? Follow that through...

If a company enjoys lower taxes, it has more money to hire more workers. A job is how a worker gets money. In fact, a job is an ongoing means of revenue. Every two weeks, you have more money. It's a gift that keeps on giving.

If Hillary takes away that money from the company and dillutes it in distribution to everyone, it's a small and infrequent occurrence. Are you going to take that little bit of money and create a job with it? No. (Few people today know how to create jobs and Hillary's not among that group. She's never started a business that, you know, creates jobs.)

Will that pittance of redistribution from the company tax breaks to you cause money to continue to spring forth ongoing dollars like a job would? No. You'll buy a few things with and then it's gone - at the expense of the jobs lost for her desire to take money from a job-producing enterprise. No jobs were created in this farcical exercise. In fact, jobs were lost.

Unfortunately, there are too many people in Iowa who watch these ads, ridiculous on their face, and come away thinking that Hillary is a great problem-solver.

Obama, by the way, has a similar commercial, where some older fella smiles at the end of the commercial that Obama is gonna take care of him. Hoo boy, what a hoot.

Creepy and short-sighted is what it is. It's like aspiring to build a football team that is equal in talents not by making them work to achieve it but by tying all of their shoestrings together so that they can all run at the same speed.

Argue with me if you like. I hold up the example of country after country in Europe that has tried wealth redistribution and socialist policy only to the faltering of their economies and weakened standard of living and high unemployment rates. Today's example is Denmark.

I write with passion about politics here on beatcanvas to do my little part to ensure that America is not soon an example from this hemisphere. Unfortunately, we have too many politicians who think they're smarter than the capitalist system. And too many voters who believe those politicians.


Tags: politics
by Brett Rogers, 12/6/2007 2:31:52 AM


I nominate this for post of the year from any blog/website I have read. Absolutely perfect.

Please, someone try to argue these points. Anyone???



Posted by Pale Rider, 12/6/2007 11:54:15 AM

The far left won't be happy until we're all living in poverty, equally.



Posted by Kelly, 12/6/2007 12:12:12 PM

Wow... thanks, PR. I took a break from coding and read the article and got passionate.

lol, Kelly. "Living In Poverty Equally." Feels like an anagram in the making. Maybe this:

Handing Out Poverty Equally

The audacity of some politicians...



Posted by Brett Rogers (, 12/6/2007 12:48:36 PM

and what about the economic stagnation of a country when a great majority of it's wealth is concentrated in the hands of a few? Lower income inequality boosts aggregate demand and consumption, both of which rich individuals need to continue their businesses. Further than this, the issues of income inequality become more apparent as time progresses, leave it undealt with and and you will see how it tears away your society, enhances racial tensions and reinforces segregation. Surely on this basis it is better to intervene than to wait around for the situation to worsen. Yes I agree tax levels are often too high, and a hand up rather than a hand out is wise, but to suggest the capitalist system is best within itself I feel is entierely incorrect. The capitalist system and all the greed and corruption it centers on are responsible for the recent sub-prime mortgage crisis and recession.



Posted by gurdeep, 4/22/2010 6:40:51 AM

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