[StBernard] How to Tax the Rich

[Westley Annis]

How to Tax the Rich
Try giving them perks and privileges (an extra vote?) in return, says
'Dilbert' creator Scott Adams.
By SCOTT ADAMS


Scott Adams
If the rich can be taxed at a different rate, why not other differences in
how they are taxed?

The president was too polite to mention it during his State of the Union
speech on Tuesday, but here's a quick summary of the problem: The U.S. is
broke. The hole is too big to plug with cost cutting or economic growth
alone. Rich people have money. No one else does. Rich people have enough
clout to block higher taxes on themselves, and they will.

Likely outcome: Your next home will be the box that your laser printer came
in. I hope that you kept it.

Whenever I feel as if I'm on a path toward certain doom, which happens every
time I pay attention to the news, I like to imagine that some lonely genius
will come up with a clever solution to save the world. Imagination is a
wonderful thing. I don't have much control over the big realities, such as
the economy, but I'm an expert at programming my own delusions. I make no
apology for that. A well-crafted delusion can be a delicious guilty
pleasure. And best of all, it's totally free. As a public service, today I
will teach you how to wrap yourself in a warm blanket of imagined solutions
for the government's fiscal dilemma.

To begin, assume that as the fiscal meltdown becomes more perilous, everyone
will become more flexible and perhaps a bit more open-minded. That seems
reasonable enough. A good crisis has a way of changing people. Now imagine
that the world needs just one great idea to put things back on the right
track. Great ideas have often changed history. It's not hard to imagine it
can happen again.

Try to imagine that the idea that saves the country is an entirely new one.
It's too much of a stretch to imagine that a stale idea would suddenly
become acceptable. In fact, that's the dividing line between imagination and
insanity. Only crazy people imagine that bad ideas can suddenly become good
if you keep trying them. So let's assume that our imagined solution is a
brand new idea. That feels less crazy and more optimistic. Another advantage
is that no one has an entrenched view about an idea that has never been
heard.

For those of you with healthy egos-and that would be every reader of The
Wall Street Journal-you can make this fantasy extra delicious by imagining
that you are the person who comes up with the idea that saves the world.
I'll show you how to imagine that. I think you'll be surprised at how easy
it is.

I spent some time working in the television industry, and I learned a
technique that writers use. It's called "the bad version." When you feel
that a plot solution exists, but you can't yet imagine it, you describe
instead a bad version that has no purpose other than stimulating the other
writers to imagine a better version.

For example, if your character is stuck on an island, the bad version of his
escape might involve monkeys crafting a helicopter out of palm fronds and
coconuts. That story idea is obviously bad, but it might stimulate you to
think in terms of other engineering solutions, or other monkey-related
solutions. The first step in thinking of an idea that will work is to stop
fixating on ideas that won't. The bad version of an idea moves your mind to
a new vantage point.

With that technique in mind, I will describe some bad versions of how
society might go about the job of convincing the rich to accept higher taxes
on themselves. But first I need to address the illusion of fairness.

We like to think that fairness is an objective condition. If you and a
friend simultaneously find a dollar on the street, fairness suggests that
you split it. But what if your friend is a billionaire and you are starving?
Is it still fair to split the dollar? And what if you and your friend
noticed the dollar at the same time but your friend was quicker to pick it
up? Does that count for anything?

In reality, fairness is not so much about the actual distribution of loot as
it is about the psychology of how you feel about it. That's important to
understand because the rich won't give up their cash unless they feel they
are getting something in return. And so far, saving the country doesn't seem
to be enough of a payoff.

If we accept that the rich can be taxed at a different rate than everyone
else, we can also imagine that there could be other differences in how the
rich are taxed. That's the part we can tinker with, and that's where the bad
version comes in. In a minute, I'll float some bad ideas about how the rich
can feel good while the rest of society is rifling through their pockets.

I can think of five benefits that the country could offer to the rich in
return for higher taxes: time, gratitude, incentives, shared pain and power.

Time. It's useful to keep in mind how the rich are different. When you are
poor, you are willing to trade your time to earn money. When you are rich,
you trade your money to get more time. For example, the rich hire people to
clean their homes, and they don't waste time shopping for bargains. In
business school I learned that when people have different preferences, you
can usually find a way to engineer a deal.

Suppose we change the tax code so that in return for higher taxes on the
rich, we figure out a way to give the rich some form of extra time. The bad
version is that anyone who pays taxes at a rate above some set amount gets
to use the car pool lane without a passenger. Or perhaps the rich are
allowed to park in handicapped-only spaces.

Ridiculous, you cry! Remember, this is the bad version. And if the rich are
only a tiny percentage of the population, they would have almost no impact
on the traffic in car pool lanes or the availability of parking spaces for
the handicapped. You wouldn't even notice the difference.

You could imagine a host of ways the government could trade time for money.
Suppose all government agencies had a mandate to handle the affairs of the
rich before everyone else. You wouldn't even notice that your wait at the
Department of Motor Vehicles was 2% longer.

As a bonus, what happens to the economy when the people who are most skilled
at making money suddenly have extra time? My bet is that they stimulate the
economy by spending more or by earning more.

Gratitude. Imagine that the government arranges to provide genuine
person-to-person gratitude to the rich in exchange for higher tax rates.
Suppose (bad idea alert) the government makes it a condition that anyone
applying for social services has to write a personal thank-you note to a
nearby rich person who, according to a central database, hasn't lately
received one. Gratitude goes a long way. It's easy to hate the generic
overspending of the government. It's harder to begrudge medical care to
someone who thanks you personally. It's a bad idea, I know. Don't judge it.
Just let it nudge your imagination to someplace better.

Incentives. Another approach, also a bad idea, might be to treat the rich
more like venture capitalists than sources of free money. Suppose the tax
code is redesigned so that the rich only pay taxes to fund social services,
such as health care and social security. This gives the rich an incentive to
find ways to reduce the need for those services, which would in turn keep
their taxes under control. Perhaps you'd see an explosion of private
investment in technologies that make it less expensive to provide health
care. You might see rapid advances in bringing down the cost of housing for
seniors.

Meanwhile, the middle class would be in charge of funding the military. That
feels right. The country generally doesn't go to war unless the middle-class
majority is on board.

Shared Pain. Happiness is a relative thing. That's how humans are wired. And
we're just screwed up enough to feel comfort when our pain is shared. So how
can we make the overtaxed rich feel as if the rest of society is feeling a
little extra pain?

I doubt that the rich will agree to higher taxes until some serious budget
cutting is happening at the same time. That makes the sacrifice seem shared.
The rich will feel unfairly singled out unless everyone is taking a hit. And
budget cuts make the government seem better managed. That matters.

The bad idea here is to change the debate from arguing about which programs
and how much to cut, and instead to do what the private sector has been
doing for decades: Pull a random yet round number out of your ear, let's say
a 10% cut, just for argument's sake, and apply it across the board. No
exceptions. Everything from the military to welfare to federal pensions to
government salaries would take the same hit. Managers in the private sector
have been handling budget cuts this way for years. They know that their
subordinates are all professional liars, so there is no reliable information
for making cuts in a more reasoned way. They also know that any project can
get by with 10% less money if there is no alternative.

Power. Everyone loves power. I'm guessing that the rich like it more than
most people, on average. Another bad idea is to give the rich two votes
apiece in any election. That's double the power of other citizens. But don't
worry that it will distort election results. There aren't that many rich
people, and they are somewhat divided in their opinions, just like the rest
of the world. And realistically, is the candidate who gets 51% of the vote
always better than the one who gets only 49%? That's a risk I'll take.

I think I've given you enough bad ideas to prime your imagination. Now it's
your turn. If you think that solving the nation's fiscal problems is the job
of elected officials, you have to ask yourself how that's working so far.
The solution, if it exists, won't be anything that looks like normal
business. The rich have the money, and they aren't going to give it up for
nothing. I know because I am one, and yes, we do hold meetings.

The way our political system is designed, politicians are not free to float
bad ideas. Doing so is a sure way to lose an election. Politicians aren't
even free to support good ideas if they are too far from the norm. But as
citizens, we're free to speculate all we want. And if some new and better
idea gains popularity at the grassroots level, our elected leaders would
then be able to embrace it. In other words, it's literally your job to fix
the budget problem because your government isn't equipped to handle it. The
ideas I've mentioned here are bad by design. But if a few million people
start brainstorming their own ideas for solving the debt problem, someone
might come up with a winner. And if that idea gains popular support on the
Internet, it frees politicians to consider it. I have no problem imagining
that something along those lines can happen, and the thought feels
delightful.

-Mr. Adams is the creator of "Dilbert."