The old “53% vs. 47%” meme that got so much attention in the 2012 election resurfaced this week when it came out that Colorado gubernatorial candidate Bob Beauprez apparently first coined it at a 2010 Rotary Club speech. The 47% who pay no income tax, he said back then, are “dependent on the largesse of government” and “perfectly happy that someone else is paying the bill.” The talking point got traction with the Tea Party and was soon picked up by politicians like Paul Ryan (who warned we were approaching “a net majority of takers vs. makers”) and Mitt Romney.
Of course this is pure buncombe. It presupposes that high taxable incomes result primarily from being “makers,” when the truth is just the opposite. The higher your income, in fact, the more likely you’re a taker who’s — all together now! — dependent on government.
It’s possible to get moderately wealthy — say, an income that qualifies you for the “top 1%,” which is somewhere under $400,000, or assets in the low millions — through genuine entrepreneurship. Even at this level, of course, it’s more likely you have an income heavily inflated by membership in a licensing cartel, or help manage a highly authoritarian, statist corporation where your “productivity” — and bonuses — are defined by how effectively you shaft the people whose skills, relationships and other human capital are actually responsible for the organization’s productivity. But it’s at least possible to get this rich by being a maker of sorts, by being more adept than others at anticipating and meeting real human needs.
But you don’t get to be super-rich — to the tune of hundreds of millions or billions of dollars — by making stuff. You get that filthy rich only through crime of one sort or another (even if it’s technically perfectly legal in this society). You get the really big-time money not by making stuff or doing stuff, but by controlling the conditions under which other people are allowed to make stuff and do stuff. You get super-rich by getting into a position where you can fence off opportunities to produce, enclosing those natural opportunities as a source of rent. You do it by collecting tolls and tribute from those who actually make stuff, as a condition of not preventing them from doing so. In other words you get super-rich by being a parasite and extorting protection money from productive members of society, with the help of government.
So don’t be fooled by the fact that some of us aren’t paying any income taxes. We pay lots of taxes — to rich takers who live off our largesse. The portion of your rent or mortgage that results from the enormous tracts of vacant and unimproved land held out of use through artificial property rights is a tax to the landlord. The 95% of the price of drugs under patent, or Bill Gates’s software, is a tax you pay to the owners of “intellectual property” monopolies. So is the portion of the price you pay for manufactured goods, over and above actual materials and labor, that results from embedded rents on patents and enormous brand-name markups on (for example) Nike sneakers over and above the few bucks a pair the sweatshops contract to make them for. So is the estimated 20% oligopoly price markup for industries where a few corporations control half or more of output. If by chance you do pay federal income tax, half of it goes to support the current military establishment or pay off debt from past wars — wars fought for the sake of giant corporations.
The “takers,” in short, are the people Romney spoke to at $1000/plate fundraisers, who pay Hillary Clinton several hundred grand for a speech reassuring them Wall Street’s not to blame. The entire Fortune 500, the entire billionaire plutocracy, depends on largesse from us makers — and they can only do it with government help.
Citations to this article:
- Kevin Carson, The “Makers” and “Takers” — Not Who You Think, Dhaka, Bangladesh New Age, 07/21/14
- Kevin Carson, The “Makers” and “Takers” — Not Who You Think, Before It’s News, 07/12/14
Nice article. This is part of the reason why we've lost some sectors of manufacturing in the USA. It's easier and more profitable to use the state barriers to rapidly magnify your wealth. Energy that could have gone to making things better, cheaper, more plentiful, etc., instead are being used for this purpose.
Of course, you also have to point the finger at labor laws, high corporate tax rates, minimum wage laws, and whatever new regulation the state dreams up, and on and on, as other reasons why companies that make things have fled. But, this is a big part of it, too.
Thank you! It's wonderful to see someone put this so well.
My recent post A talk I gave in church last year
First of all, I agree with you fundamentally. Blaming the supposed 47% for being on the public dole (if that number is even correct) is hypocritical and complete nonsense when it is those government policies, made to benefit many of those complaining, that is creating this "dependency" crisis in the first place. They fix the governmental policies to become super rich at everyone else's expense and then complain that people are poor and need assistance. Agreed and very good point Mr. Carson.
I do have a few objections though if anyone cares to read…
"So is the portion of the price you pay for manufactured goods, over and above actual materials and labor" – The price you pay for an item should be above what it costs to produce. What incentive would there be to make anything if you did not earn a profit? Prices should be as high as people are willing to pay. This is a fundamental tenant of economics. A free market will produce more competition and a natural lowering of prices will occur, but this is not something business owners should be forced to do out of a misguided sense of collective altruism. If you provide a benefit to society without coercion (as defined by Rothbard – not Hayek or Nozick) you should be rewarded for your efforts. The profit loss system inherent in the free market gauges the extent to which society deems your contribution as beneficial and rewards you accordingly. This system is of course distorted by the presence of any, let alone ubiquitous, government coercion.
" If by chance you do pay federal income tax, half of it goes to support the current military establishment or pay off debt from past wars — wars fought for the sake of giant corporations." Agreed. And the other half goes to ensure the poor stay poor and alive enough to make it to the voting booths. Corporations are surely to blame for this, but let us not forget the role unions have played in keeping the poor, and especially the black poor, down. This site seems at times favorable toward labor union activity, which is a bit disconcerting considering all the wrongs done by them through the coercive arm of the government. I am a right leaning libertarian willing to throw mud at and recognize the evils of corporations; is this left leaning site unwilling to do the same in regards to labor unions?
"a tax you pay to the owners of “intellectual property” monopolies" – This is probably the biggest problem I have with the left libertarian perspective. If intellectual property is invalid then it invalidates all other types of property (as Spooner suggests), and we'd live in a society where everybody owns everything and nothing. Let me illustrate my case:
Individual A spends 10 years writing a book at his own personal expense (money, time, opportunity, etc.). In other words,10 years of intellectual labor goes into the making of this book. Individual A then decides his book is ready to sell and approaches individual B. Individual B, upon buying a copy of the book, decides he can also find buyers for this book. Individual B then does so and creates wealth for himself as a result. To me this is clearly theft of individual A's property. Please explain to me how it is not. What right does individual B have in creating wealth for himself when he did none of the work, apart from finding buyers and reprinting the book?
"A man’s ideas are his property. They are his for enjoyment, and his for use. Other men do not own his ideas. He has a right , as against all other men, to absolute dominion over his ideas. He has a right to act his own judgment, and his own pleasure, to giving them, or selling them to other men. Other men cannot claim them of him, as if they were their property, and not his; any more than they can claim any other things whatever, that are his." – Lysander Spooner
http://lysanderspooner.org/node/10
Correction: When I say labor unions above I mean state sponsored. I realize labor unions can exist based on peaceful contracts between associations of workers and business owners (capitalists!) in the free market.