The Great Divergence

[Jester]

Only if the wealthy demanded recompense from the engines of production.

Hunh? If your saved money is worth less tomorrow than today, that's inflation. Prices of goods and services are going up relative to the money you use to buy them - because the money is being taxed away at a fixed rate. What does that have to do with anyone "demanding" anything?

The wealthy already demand a high ROI on investments (>5% is a must, and 10% or better is desired).

How dare they find the best return on their investments! They should be stripped of their wealth by the state, Comrade! To arms!

The Bush tax cuts (namely to 15% drop in Capital Gains, 100% drop in death tax, and 100% drop in dividend income taxes) didn't result in the opposite, deflation. Just more profits for those who re-invest in building the engines of productivity.

I don't understand. Why would we expect the Bush tax cuts to lead to deflation? The monetary supply isn't changing. The price level isn't changing. What's changing? There's no direct tax on savings, which is what would cause the inflation-like effect, except possibly the estate tax, which is too trivial to have a large price impact. I just don't understand the logic.

Taxing idle wealth engages it in the economy. What I'm really tired of is a government growing out of control, run by those who don't pay for it, and payed for by those who can't afford it.

So, let me get this straight. Government is supposed to tax idle wealth, and presumably spend it to "engage" it. But you're also really tired of government growing, and doing things it can't pay for, and run by those who are not taxed for it.

Do you want people to accumulate wealth privately? Or don't you? The Austrian answer is obvious: Yes, yes, a thousand times yes. Savings are the engine that drives growth, and a wealth tax is nothing more than a tax on success by the chronically unsuccessful government. Yet you appear to be promoting the opposite, some strange form of Leninism, where the state takes control of idle wealth in order to keep it invested... I don't get it.

-Jester