Let the first $1 million everyone steals be tax free

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Another week of news of stealing: retired cops and firefighters, with the help of an ex-FBI agent, stealing from Social Security; JP Morgan Chase again caught more or less stealing; Frontline giving a look at the institutionalized thievery (via insider trading) that is Wall Street. We are reminded how often “winning” in our society involves theft. And the Frontline show made it clear how going to “the best schools”—e.g. the Wharton business school or Stanford University—is, and perhaps above all, a way to make the connections necessary to be a truly wealthy thief. To make money on inside information you need first to know people who have access to such information and who have learned to have little compunction about trading this information for money or other rewards. (A “nice” detail of the Frontline program: When faced with the possibility of going to prison, the inside traders were more than willing to testify against and spy on their putative friends. There is no honor among thieves.)

Even The Wharton School, and any number of other educational and cultural institutions, charities, hospitals, etc., are in on the deal. By giving large sums to them, not only can “I,” the thief, gild my ego and my reputation—thus, inter alia, defending myself against prosecution—I can also pick up stock tips from fellow big donors met at board meetings or charity events. And since the institutions are dependent on their cuts—on “my” donations—they have little interest in stopping the thievery. (Though certainly they, and many others, have great interest in appearing to be interested in stopping the thievery.)

Aargh. Besides being dismayed by this week’s reminders of the world in which I am living, and besides being dismayed to be reminded how I live my life as if I did not in fact know what it takes to get “ahead” in our society, but in fact I do know all too well, and from painful experience, . . . Besides all this, I had a “positive” fantasy this week. (We are, after all, living in the land of positive fantasizing, by thieves and their victims alike.) This fantasy centered on a new federal law that would allow the first $1 million any American stole to be tax free. But everything above and beyond the first million would be entirely taxed/taken/stolen (whatever you want to call it) by the government and used to pay for infrastructure, parks and services, for garbage disposal and mental health care, and even for education (for all our schools seem to be teaching stealing, tacitly, and thus all the more effectively).

It might be further fantasized that a $1 million cap on gains from theft would discourage thievery. But the thieves are, among other things, greatly attached to the idea that they are not subject to any rules (e.g. mortality?), and they also enjoy feeling they can take advantage of more ordinary people (a.k.a., suckers). And thieves are greatly attached, too, to money. So as soon as my law is passed (and how far off can this be?), the thieves will give yet more attention than they do already to hiding the extent of their ill-gotten gains. This can only be considered good news for any number of people and institutions, including accountants, lawyers, offshore-banking operations, and, it would seem, visual artists too. (I am looking forward to reading the article about how paintings—or collectible art objects more generally—are used to launder ill-gotten gains or to hide investment earnings. I.e., one only pays tax on declared appreciation in a painting when it is sold or transferred, so the earnings can be accumulating for generations relatively tax free, especially with the help of dishonest appraisers.)

We are never going to stop the thievery—and if the thieves and their beneficiaries now make up more than 50 percent of voters, and ill-gotten gains account for more than 90 percent of campaign contributions, we cannot even hope to do even a little tax raising. But we can fantasize. We might call this the elephant in the Bill of Rights: the right to fantasize that one’s country and its laws served different goals and different social classes than they in fact do. The bottom line, in any case, is theft.

 

Credit and Links

The photograph is from a reblog of an editorial by Professor Paul H. Robinson, who is attached to the University of Pennsylvania, just like the Wharton School and its alumnus Steven A. Cohen, the head of the inside trading firm that was the focus of the Frontline program. We might imagine that some of Cohen’s money, kicked back to the university, helped fund Robinson’s work, but the connection is likely not so direct. And Robinson in any case is not at Wharton, but at the U Penn law school, and his editorial proposes a way of combating the Cohen and his many colleagues: through criminal prosecutions of inside traders. The editorial was originally published in the Los Angeles Times, 30 July 2013.

The Frontline program, To Catch a Trader, first aired on 7 January 2014.

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