Unraveling Neil Buchanan’s Wealth Redistribution Proposal

Neil H. Buchanan, in an opinion piece written for CNN, prescribes a tax on “out of control” Wall Street bonuses to cure a problem in America but fails to give any true economic rationale for such a tax. He says that it will not discourage the “best and the brightest” from entering the American Financial industries because they will still be in a better position financially than in other countries. The benefit of this tax, he says, evoking Krugman economics, will be to encourage Wall Street financiers to join other professions. Following his logic, they must be making more money to make this career change. This, of course, undoes his previous claim that larger taxes do not always cause a disincentive where they are levied. Why else would there exist an incentive to change careers if not in order to make more money? This line of reasoning he likens to economic dogma, which is surprising coming from an economics professor.

So, Mr. Buchanan, what will we do when the ranks of American financiers gives way to the teeming new numbers of high school teachers…etc. that you herald? What an ominous prophesy, though you seem to revel in the notion.

The only significant justification that Buchanan brings to the table for such a tax is to address the “inequity [that] is a result of our out-of-control financial sector.” So, despite an entire article of nonsensical economics and labyrinthine cause and effect logic problems, Buchanan’s true motives behind his tax proposal are exposed. What he proposes is a wealth redistribution tax to spread out the salaries of private individuals through government policy.

- Philosoguy

In Response To: http://www.cnn.com/2009/OPINION/12/28/buchanan.bonus.tax/index.html

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