"We're Living in an Ayn Rand Economy" by Paul Buchheit

It turns out the "Paul Buchheit" that wrote the article (whom I suspect is this fellow http://www.commondreams.org/paul-buchheit) is not the "Paul Buchheit" of YC.

Post edited.

It is clear the author of the article has not read Atlas Shrugged.

And now for a "someone said something wrong on the internet" rebuttal. There is too much horse shit to respond to, so here are just three points from the first few paragraphs.

----- Perhaps Ayn Rand never anticipated the impact of unregulated greed on a productive middle class. -----

Rand observed that regulations are created by the financially and politically powerful to restrain and oppress the individuals trying to improve their lot in life and change the world. Also, we live in a very heavily regulated economy, leftist delusions of persecution not withstanding.

----- Ayn Rand’s philosophy suggests that average working people are “takers.” -----

No, Objectivism suggests no such thing. In fact, in the opening scenes of Atlas Shrugged, the character Eddie Willers admires a bus that is being "expertly driven". Under Objectivist philosophy, you are virtuous when you put forth the best within yourself. A plumber can be, and often is, more morally virtuous than a CEO.

"Takers" or "moochers" are not "working people". They are individuals who, through coercion or deception, consume more than they produce.

----- Perhaps she never understood the fairness of tax money for public research and infrastructure and security, all of which have contributed to the success of big business. -----

You are right, she didn't understand the fairness of the coercive taking of money from one set of people who's only crime is to produce value, only to hand that money over to another set of people whose only claim is that they need it. Atlas Shrugged, through numerous sub-plots and character development, explain how Rand is staunchly opposed to corporate welfare. Also, Rand is not an advocate of "big business", and nearly all of the villains in Atlas Shrugged are CEOs.

If it wasn't clear from the article content this isn't the Paul Buchheit that created gmail and was a YC partner

http://en.wikipedia.org/wiki/Paul_Buchheit

It is this Paul Buchheit who teaches economic inequality at DePaul University. http://www.alternet.org/authors/paul-buchheit

Throughout history a reliable way to distinguish good economic thought from bad is to see what they reason about. Good economists reason from ends, viz., what they want an economy to accomplish. Bad economists reason from superficial results and moralities, viz., "category X of people are too rich" or "I personally think something is wrong with the way money is structured, so let's tax it."

And the nature of moral reasoning is that it substitutes for truth. You begin to believe things simply because they fit your narrative. But the nice thing about economics is we have data to show these things are wrong in elementary ways.

* The rich pay more taxes than the middle class. The ultra-rich pay fewer taxes than the "ordinary" rich by a few tenths of a percent.

* The marginal tax rate (including welfare, which you should) on the poor and lower-midde class is extremely high. Often the system actually penalizes you for working. By contrast, the most generous tax structure goes toward the middle and upper middle classes. Here it is, in one graph: https://lh3.ggpht.com/-_-6Fsycanmw/ULO_5kk3fxI/AAAAAAAAAU4/y...

* High corporate taxes disincentivize paying out shareholder wealth, and incentivize constantly-reinvesting behemoths. If you think corporations are too big, lower corporate taxes! Even "socialist" countries know this; the US has the highest corporate taxes in the developed world. They're the #1 reason Apple is sitting on a 12-figure cash pile, for example.

* I have no idea why the "location" of cash, offshore or onshore, even matters. It's just another vague handwavey accusation. Ooh, this cash is offshore, it must be sinister.

I can go on, but I'll stop. Here's the thing, though: I think taxes on the rich should be higher. I think corporations should be smaller. But it does an extraordinary disservice to this cause to peddle nonsense and push for more and more broken tax structures in the mistaken belief that the goal of the tax system is to punish the social classes and behaviors you don't like. The goal of the tax system is to provide for the general welfare. The best way to do this is in an equitable, progressive, even and sensible tax structure. Punishing specific behaviors is how you create the tax loopholes that the rich allegedly take advantage of (actually, the upper middle class is in best position to take advantage of these anyway).

I'm a fan of Ayn Rand and her books. But pointing out obvious issues with this article doesn't take a fan, it just takes someone who knows her work. It's not correct.

"Ayn Rand’s novel “Atlas Shrugged” fantasizes a world in which anti-government citizens reject taxes and regulations, and “stop the motor” by withdrawing themselves from the system of production."

Ayn Rand was not anti-government, nor did her heroes "withdraw themselves from the system of production." They continued to be very productive - they just moved away.

"Ayn Rand’s philosophy suggests that average working people are “takers.”

False, and absolutely unsubstantiated. I've read most of what she wrote, and nowhere is this suggested.

"In keeping with Ayn Rand’s assurance that “Money is the barometer of a society’s virtue,” the super-rich are relentless in their quest to make more money by eliminating taxes."

Ayn Rand did not advocating hoarding money for the sake of money. To her, money is a tool for trade amongst productive people. It's the production that matters, and money is just one of the potential results.

She wrote: "So long as men live together on earth and need means to deal with one another—their only substitute, if they abandon money, is the muzzle of a gun."

"Ayn Rand’s hero John Galt said, “We are on strike against those who believe that one man must exist for the sake of another.” In his world, Atlas has it easy, with only himself to think about."

Someone hasn't read the book, because John Galt didn't have it easy. This particular quote can be summarized simply by saying "Let us live our own lives."

This is a perfect example of the kind of political clap-trap that belongs on /r/politics and not HN.

Besides, this line:

Ayn Rand’s philosophy suggests that average working people are “takers.”

is such a complete and total mis-statement regarding Rand's works that I quit reading there. The author is clearly completely clueless.

The author is spreading misinformation. What we have is corporatism, which thrives in a highly-regulated economy, and does not favor small business or entrepreneurship. The rich and elite are attracted to the political oligarchy and heavily influence it. Other evidence is the evisceration of the middle class and the expansion of the poor. The rich are benefiting off the the middle class, again, made possible by the State.

Further, corporations are not free-market entities; they are a product of Statism and would not exist in a free market system.

I feel like the argument he makes is very circular though. He lambaste the rich for investing in low risk (government bonds), and then says that we need more taxes to support more government R&D. Perhaps the answer isn't a return to a different tax structure, but the government acting more like a corporation (in this limited area). Making money off their R&D and financing it through debt.

The comparisons to Ayn Rand are going to attract a lot of comments, but what I found interesting about the article was the commentary on the distribution of the tax burden.

For all the ranting back and forth, the fact is that the total tax burden in the U.S. is actually quite flat for 60% of the population: http://www.ctj.org/pdf/taxday2011.pdf. The total tax rate for the middle 20% is 25%, versus 30% for the top 1%. The people who pay less are the bottom 40% and the top 0.1%.

However, it almost doesn't matter what the taxes on the bottom 40% and the top 0.1% are. These groups together only account for about 15% of all the income earned in the U.S. (http://www.epi.org/publication/ib347-earnings-top-one-percen...). The vast majority of U.S. income (85% of it) is taxed within a band between roughly 25-30%.

Paul addresses two points. First that corporations and the rich avoid taxes and two that there isn't enough money to fund the public good. The solution to both is very simple.

First, completely scrap our current tax code. Start over from scratch. To avoid cheating make it insanely simple so their aren't any loopholes. Everyone and every company pays X% of their net income. No deductions. No anything.

Second, government has plenty of money. It's just gotten so inefficient due to bureaucracy that it can't do anything. The best story was a road that got washed away, government came in and said it was going to takes years to repair and cost over a million dollars. The town final got fed up and did it themselves. In a weekend.

Another great example is the school system. Bureaucracy, administrators, and union work rules have exploded the costs. The number of teachers has stayed stagnate while I believe administrators have quadrupled.

I believe this is in response to a central point of the article. When the US Government decides to increase tax collection, it always wants to take from the rich and makes a big deal out of it. The rich always are driven into tax-free investments and keeping money in lower-tax areas of the world. The revenues do not materialize.

At this point, the government has a choice to make: will it keep trying to obtain the extra money where it can still be found? The answer is always yes, and it can always be found in payroll taxes and consumption taxes because they can so reliably be collected. This is how regressive taxes come about. They are always consequences of progressive taxes.

So, while I like the idea of the middle class paying a small payroll tax while, say, seven figure capital gains are taxed as income, I know that the result of that law is going to be a larger payroll tax, or a national electricity tax, or something like that. The appeal in this essay is honest, but the initiatives it may boost will only result in more essays like this in the future.

If anything, this is an indictment of taxation, not those who optimize. But it does make a good case that we ought not pay attention at all to the rich complaining about government taking all their money. A key line: "Job creators come from the middle class."

(a) Too many pop-ups on Slate.com to even read the article.

(b) Ayn Rand was a terrible writer (hyperverbose) and philosopher (simplistic idealism). I doubt most modern day adherents have read "Atlas Shrugged".

Corporations don't pay taxes. Whatever taxes are levied on them, they build into the price of what they sell, which is ultimately paid for with money that's already been taxed.

I think we're at the height of the cycle, or nearing it right now, similar to right before the Progressive Era of last century.

Once the baby boomers are fully overwhelmed by their progeny in the voting roles (which should take another decade or two), and the red scare mentalities that caused rejection of any ideas that might be good, but are grouped in with "communism" historically, we'll be in a more rational place.

Or we might end up like Idiocracy...

There is so much wrong with this article, that it's really hard to even know where to start.

> Ayn Rand’s philosophy suggests that average working people are “takers.”

Ayn Rand glorifies working people, like the engineers on the Taggart line, the foremen at Rearden Steel, and Dagny's assistant Eddie Willers.

Her villains are mostly crooked rich businessmen who collude with crooked politicians.

It's hard to believe Paul even read Atlas Shrugged. His claim is a blatantly dishonest one.

> In reality, those in the best position to make money take all they can get, with no scruples about their working-class victims, because taking, in the minds of the rich, serves as a model for success.

It's deceptive to simply say "paying less taxes" == "taking."

It's true that if corporations pay low taxes, it's not fair for the middle class and small businesses to pay high taxes. But why jump to the conclusion that we need to raise corporate taxes, instead of lower everyone's taxes? (I'll leave answering that question as an exercise for the reader.)

Why are Paul Buchheit's ideas about how to spend _my_ money, more valid than my own? If I had money to invest, I'd put it in scientific and entrepreneurial ventures that _I_ deemed most worthwhile. If Paul is going to make those decisions for me, I'd rather just not contribute to a (rigged) social system in the first place.

Whenever I come across any post on Ayn Rand on Hacker News I think of Adam Curtis's "All Watched Over by Machines of Loving Grace." I believe Rand's relationship with her lover, specifically how the relationship starts and how the relationship ends, summarizes her philosophy.

More info on the Ayn Rand cult: http://www.lewrockwell.com/rothbard/rothbard23.html