The Democratic Party has let the mask slip somewhat in the past week. Between comments from freshman Rep. Alexandria Ocasio-Cortez, D-N.Y., and a radical proposal from presidential hopeful Sen. Elizabeth Warren, D-Mass., the emergent wing of the Democratic Party have made it clear: Socialism is here to stay.
Ocasio-Cortez has made her allegiance to socialism clear, building her entire brand as an intersectional Bernie Sanders 2.0. She made headlines last week for claiming that “a system that allows billionaires to exist” is immoral, and her policy adviser Dan Riffle updated his Twitter name to reflect the new fundamental truth of the far-left: “Every billionaire is a policy failure.”
Staking out the scent of Democratic hype, Warren followed Ocasio-Cortez’s lead, embracing her role as a warrior against the wealthy as she attempts to recoup media attention following her botched launch of her presidential campaign. Warren announced a radical wealth tax, which would annually fine the assets of millionaires and billionaires. Then, over the weekend, she decided to take on Washington Redskins owner Dan Snyder.
This billionaire NFL owner just paid $100M for a “superyacht” with its own iMax theater. I’m pretty sure he can pay my new #UltraMillionaireTax to help the millions of yacht-less Americans struggling with student loan debt. https://t.co/Gk4ifAkxdT
— Elizabeth Warren (@ewarren) January 26, 2019
There Warren gives lie to this pretense of being “capitalist to the bone” and reveals the true consequentialist impetus behind the new Democratic Party: envy.
While the country has come to a broad consensus that the public has to fund nonexcludable and nonrivalrous goods and services — such as our military and parks — as well as a number of services seen as public investments in our society — such as medical research and welfare for the less fortunate and at-risk — both parties have struggled to define the extent of and role of public spending. For all of the turmoil in the Republican Party on issues from immigration to healthcare, the GOP has ran roughly in lockstep over the intention of public spending.
Democrats, however, have found themselves at an impasse: Do they embrace the liberalism of John Rawls and focus on bettering the nation’s bottom line, or do they become hardcore consequentialists, punishing wealth disparity even at the long-term detriment of everyone’s wealth?
Given the reaction to Warren and Ocasio-Cortez, it seems that the party has come to embrace the latter.
When French economist Thomas Piketty burst into the mainstream during the Obama administration with his book Capital in the 21st Century, lost liberals found one of his core gripes with contemporary capitalism revelatory: that returns on investment are greater than returns on wages. This, of course, is anything but exceptional and a basic fact taught in high school economics courses. Now it seems, this simple economic fact has driven Democrats to craft jealousy-fueled policies to target investment, job creators, and the wealthy, all in the name of equality.
Despite Ocasio-Cortez’s disdain, billionaires aren’t policy failures. In most cases, they’re policy successes. High salaries reward the high risks of entrepreneurship, taking on the immense debt, time, and personal responsibility of attempting to grow or create a business. CEOs and business leaders are responsible for the wages of all of their employees, paying back creditors, and satisfying investors. The minority of Americans responsible for our nation’s employment and economic growth may work more than 80 hours per week, taking every dollar of their firm’s revenue and trying to come back with two.
This is simply the nature of economics, an immutable force which can’t be taxed out of existence.
But that won’t stop Democrats from trying. Ocasio-Cortez wants to push top marginal income tax rates to 70 percent or more. Warren wants to upend our tax model entirely in punishing fixed assets. Both would likely have the same effect seen in California and New York: the wealthy, en masse, fleeing to greener pastures. Sure, the effect may not be too widespread yet, but more socialized nations such as France have seen tens of millions of millionaires flee the nation due to wealth taxes.
Rawls’ veil of ignorance, which has guided mainstream American liberalism over the past half-century, judges the morality of a society or system by essentially assessing the welfare of the bottom line. If you were assigned a social role in a society at random, you’re odds would be pretty good in America today as compared to any other place or time. Democrats have tended to justify expanding the role of government with measures to increase the bottom line. (Though the recent revelation that President Trump’s tax cuts paid for about 30 percent of themselves does indicate that dollars may be more efficiently spent by consumers than the government.) But the Warren wing of the party is happy to throw Rawlsianism in the trash and bring back a deliberately Marxist morality.
To be clear, neither Ocasio-Cortez or Warren’s proposals would actually fund their favorite endeavors. Warren’s wealth tax would fund exactly 1/16th of her beloved government-financed healthcare, assuming that physicians will actually stand for radically reduced reimbursement rates. But as Vanessa Williams from the Brookings Institution correctly points out, these taxes are intended as “a corrective tax, like tobacco taxes or a carbon tax, fixing the problems created by exploitative capitalism.”
The rapidly radicalizing Democratic Party is quickly deciding that capitalism itself, not just its outcomes or rules, is immoral.
The rest of the Democratic Party, struggling to define itself as they embark on 2020, will have to decide: Do they care about taxes to invest in the poor, or punish the wealthy?
