Five years ago I wrote a really banger Tweet about America’s dysfunctional tax policy.
We don’t tax the rich. We tax the high earning – me in 2021
We were in the middle of a ferocious pandemic driven capital stimulus cycle that drove spending and inflation that pretty much every economist said would end poorly.
Naturally no one cared, everyone enjoyed the extra money and if you were lucky maybe you bought a house or made some other investments.
It was briefly good times for capital and good times for some working class families who actually did catch a break for a precious moment. Alas there ain’t no such thing as a free lunch.
The portion of the population that pays quite a bit of the tax bill in America didn’t qualify for the pork barrel lard programs or the social safety net programs noticed. America’s professional class were stilly enough to be high earners who filed W-2 or 1099 income so they paid for both the rich and the poor.
Now five years later we are going through the same stupid carve out process as politicians brag about small adjustments to already well protected tax niches like seniors not being taxed on social security.
Only this time, the professional class is in a full on panic. They have been led to believe that their jobs are disappearing. So not only do they pay for social benefits they don’t get but they also might not even have the jobs next year?
Cue screaming videos of middle class women outraged about date centers. Actually it’s worse. Cue full system wide class anxiety as the middle class white color jobs that once provided status and security suddenly look precarious.
And the white collar class are afraid they might to go face the fate of the working class who got China Shocked. They are too busy to reskill. Millennials are poorly placed. So they’re are looking for scapegoats for their rage.
The real shame is that panic isn’t based on a material reality. It is partially a marketing stunt gone too far by frontier labs (give us money and we will deliver huge investment returns) and partially a helpful lie carried by useful idiots who are afraid artificial intelligence will bring about the end of the world. We should be so lucky. It’s just the end of this century of economic models.
I’d wager we are much more likely to get a middle ground where vicious knife fights between professional organizations will carve out their pound of flesh till the haunted skeleton of artificial intelligence’s broken promises haunts Capital Hill, Sand Hill Road and Wall Street. Which is a shame as it is going to make a lot of money and do a lot of good but it will also change the guards if you will. And you might like where you are at too much to give it up.
I guess I could see this coming and it did indeed change my behavior as I stopped being as concerned about income and focused on investing and growing capital. And thanks goodness I took the hint from myself five years ago. I am replacing myself. Hopefully it’s for the best.
Now pay taxes and remember to vote. Only 47% of under 45 eligible voters voted in the last election whereas around 74% of over 64 year olds voted. They really want their social benefits before they are gone for good.