The American Political Dichotomy and Its Futility

In thinking about Trump and the justifications of why you may vote for someone you don’t like, realize that for the most part, in our two party American system, it’s not so much you are voting for the person, but you are voting for the side.

You either vote for the left, or you vote for the right, regardless, more or less, of who’s at the helm.   You are voting for the ideals that these sides represent.  What are the ideals that these sides currently represent?  There are many, but I believe the biggest ideological dimension at play is the dichotomy between egalitarianism and property rights.

If you believe wealth and income should be redistributed (i.e. egalitarianism) then you vote left; and if you believe wealth and income should be retained by those who produce it (i.e. property rights), then you vote right.  Pure communism would be 100% taxation on production, and pure capitalism would be 0% taxation on production.

For the most part, we are in this middle ground of where on the order of 25% of income (averaging personal and corporate) is taxed (just guessing based on some brief research on the internet of effective tax rates).  Arguably, that’s not that bad if you are a capitalist.  Sure it could theoretically be lower, but for what we have, I’m fine with that.

However, my concern is the stability.  It doesn’t take much time to go from 25% to near 100% if certain political players get into power to enact laws and enforcement.  And it doesn’t take much of a change for capital flight to occur.  Effectively, nations compete for capital via their government services (rule of law, capital/business friendly laws) and their tax rates.  Where the capital goes, people and income follow to provide the labor that complements that capital.  So if effective rates go from 25% to say 40%, and the political landscape is such that it won’t be changing for a long time, then businesses and investors will pull out of America to other countries that are more competitive for their capital.

Once capital leaves, and incomes drop, government services will diminish as tax revenues would drop, and suddenly you are left with a situation of needing to cut back government services due to lack of resources, which can lead to civil unrest.  Anticipating capital flight, political players could then relieve property rights altogether, and seize capital before it can leave or simply prevent capital or people from leaving (such as the Chinese government with capital controls).

My biggest concern is that those who receive government resources will politically overwhelm those who produce the resources, and you get into a permanent welfare situation where wealth is perpetually consumed rather than reinvested.  Unfortunately, voting for the right is not a long term solution, only a temporary one.  You can only steer a sinking ship for so long.

This is my justification to changing suffrage from an egalitarian structure (one person one vote), to a capitalistic structure (votes proportional to taxation which is in proportion to wealth and income).  This structure would not lead to 0% taxation, and there would still be welfare, but at least it would be sustainable into the future.  Let those who create the world’s resources determine what to do with them, and not those who consume them.

Leave a Reply

Your email address will not be published. Required fields are marked *