Robin Hanson critiques Chrystia Freeland’s take on our billionaire overlords.

It doesn’t seem to matter to Freeland how deservingly the rich obtain or spend their wealth; they still must be taxed to help average Americans, even if that slows the lifting of Chinese and Indians out of poverty. It isn’t clear why she recommends the rich eagerly submit to such taxation; she suggests taxation will happen whether they like it or not. Why fear “populism” beyond its taxation? The point seems more to scold the rich, in order to reassure the rest of us that we are justified in taxing them.

It may be the case that many calling for higher taxes on the rich are belittling or even demonizing their contributions as a way to justify higher taxes.

I am starting to believe that the belittling and demonization are at least as important to many of the new rich as the taxation itself.

That sets up the possibility for a trade. We praise the rich as we redistribute their money. I am not completely joking when I suggest there might be room to turn taxation from a welfare destroying necessity to a welfare enhancing activity for everyone involved.

Suppose we start a government website which shows the taxes paid by the wealthiest Americans but instead of listing them in terms of dollars we list them in terms of “kids treated under CHIP” or “soldiers sponsored” or some other meaningful measure of government spending.

Right now paying taxes is a sign of low status. You allowed the government to get your money. However, if we advertise broadly what the money pays for then we can push tax paying as a high status activity.

This is crucial because most of the spending among the wealthy whether it is for a giant yachts or malaria vaccines is ultimately a status competition. Its either who has the biggest toys or who has done the most to save the world.

This is not a dig at the rich. Human are programmed to focus almost exclusively on status competition whenever material survival becomes a non-issue. This is why both high schools and senior homes are full of cliques.

What we want is not destroy status competition, that would be impossible even if it was desirable. What we want is to channel it.

Some status competition is obviously destructive. Tax evasion as a status competition – see Leona Helmsley– is destructive. However, if tax paying is promoted as a status competition it becomes productive. It serves the same function for the people in the competition but it serves an improved function for society.

Now, a key question Robin would be sure to ask is, why should we think paying taxes is productive. What about giving money to the poor in India. Isn’t that better than paying taxes.

There is a longer moral case to be hashed out. However, my short answer is that maintaining a pro-market polity is productive and this is becomes less likely when the average person sees the market as primarily benefiting others.

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