Steve Forbes, pinko liberal commie

By Felix Salmon
April 2, 2009

Steve Forbes is no fan of progressive taxation — the idea that in a community where all contribute to the commonweal, the better-off should sacrifice more of their income than the poorer folks. Indeed, he published an entire book, entitled Flat Tax Revolution, to the proposition that any burden placed upon the well-to-do should be shared equally by all.

And yet here’s the latest announcement from his eponymous magazine, Forbes:

Other measures to be taken include: suspending 401K matching contribution; salary reductions for anyone making over $100,000, amounting to 10% of the increment over $100,000. Also, employees will have a week long furlough with no pay.

This is taxing the rich! It’s class warfare! Why should those employees earning a six-figure salary be singled out for pay cuts? If you cut their pay, don’t you know that you’re going to reduce their incentive to work hard, and also the incentive for lower-earning employees to aspire to their position? And these are the most productive members of the firm! You’re punishing success! You should be giving the higher-paid employees a pay rise, instead — that will surely boost corporate revenues!

Come on Steve, walk the walk. If the rich can’t be treated equally with the poorer at Forbes, where is the hope for them in this world?

16 comments

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Obviously you’re being facetious, but I still feel someone ought to point out that there’s a difference between a private firm voluntarily making such a decision and having it mandated by government.

I could be equally facetious and ask why if increased income equality is such a good thing don’t more firms adopt a policy of equal compensation for all employees.

Posted by Erik | Report as abusive

On a somewhat related note, I was wondering recently whether talk of “nationalizing” banks would go over better if it were pointed out that Continental Illinois was more or less nationalized under Reagan.

Um, the Forbes flat tax also included an “exemption,” i.e. the tax rate was zero on the first X dollars of income.

So his wage cuts have EXACTLY the same structure as his flat tax proposal–a standard exemption (in this case $100,000), with a flat 10% above that amount. There is no hypocrisy or inconsistency here at all.

I wouldn’t vote for Forbes, but I think you owe him an apology.

Posted by ed | Report as abusive

Steve Forbes watch in the works?

“progressive taxation — the idea that in a community where all contribute to the commonweal, the better-off should sacrifice more of their income than the poorer folks.”

30 % of $1,000,000 actually is a bit more than 30% of $10,000. So while millionaires may not be paying “more of” their income, they certainly are paying a lot more income. Prima facie, a flat tax is arguably the most “fair” rate of taxation. The argument for progressive taxation rests largely on the theory of the diminishing marginal utility of money, which is impossible to prove, and which is contradicted by the behavior of most homo sapiens in London, Hollywood, New York, and possibly elsewhere.

Posted by maynardGkeynes | Report as abusive

If I knew trolls were now employed by Reuters I would’ve sent in my resume a long time ago. Who should I forward it to?

Posted by Chad | Report as abusive

Well, one can only hope that his tacky little magazine is in trouble.

I see many diehards defendin his tax plan here. They might be well advised to look at the consequences of implementing the flat tax in the Baltic Republics.

http://www.thebigmoney.com/articles/judg ments/2009/03/31/flat-tax-flat-lining

I can hardly wait to listen to the lame refrain: “–The Baltics aren’t a real example….”

Then right wingers will then have come to sound fully like the left-wingers when I was in college, defending the idea of Communism from the reality that Communism governments were basically –well, worthless.

Posted by Tim Connor | Report as abusive

Well, there’s a world of difference between a rich _person_ and a rich _employee_. Given that it’s mostly been middle and upper management carrying on as if they owned the businesses, I say let ‘em take a share of the pain.

Posted by Ian Kemmish | Report as abusive

Who is John Galt?

Posted by Dirk | Report as abusive

Felix, you need a little lesson on taxation. A 10% flat tax on $30,000 and on $100,000 of income would generate $3,000 and $10,000 in tax revenue, respectively. With a flat tax the better off are sacrificing more of than income in taxes than the poorer folks. It’s sad that you didn’t know this.

Posted by Tom | Report as abusive

The real problem is that so many more American ultra rich people exist than ever before, and not just due to population increases. Reagan reduced tax rates for the ultra rich from a top 92% rate in the ’50′s to about 1/3 of that today. Thus, more rich people were instantly created, which was Reagan’s big agenda. Sure, lots of you will say that’s just great as you benefitted, but shouldn’t everyone share the burden of running this country relative to what they have gotten from it in opportunities and rewards? I think so.

I think tax rates should return to the 50′s rates, then some of this country’s repulsive money grubbing hubris and greed would be lessened immediately and we would then be seen with more favor in the rest of the world where we are now mostly disliked or even hated.

Posted by richard | Report as abusive

That’s not communism at all. It’s a tactic known as “stooping to conquer”. Quite simply, our rulers know that they have to make a few short-term sacrifices to stave off popular unrest, so they can maintain long-term domination over us and the world. Our rulers have been doing this for centuries – this is how the welfare state was established, for instance – nothing new here.

Posted by Nick | Report as abusive

Nice job Felix! Love your ironic humor!

With flat taxes — or any radical ideology — it’s amazing how people can fool themselves into believe irrational things. You highlighted this well. The fact that you ruffled so many feathers proves you made the point!

So. While I’m sad to see the world in such economic crisis, I’m happy that Milton Friedman has lost all credibility. None of his most conservative policies ever held up with real-world testing (including the Baltic experiment another respondent mentioned). It was all just wishful thinking on the part of folks who were so selfish to the core that they had to try to create an economic model that justified their selfishness.

I might be a little too giving and generous by nature, but I think at this point there is enough empirical evidence supporting the beneficial effects of non-selfish programs — from progressive taxation to regulation to social welfare — that we shouldn’t have to argue about this any more. Why is it that conservatives can’t accept what really works? Oh wait. It’s because they’re inherently selfish….

Ok. So keep deluding yourselves.

Posted by Etherialgirl | Report as abusive

‘Why should those employees earning a six-figure salary be singled out for pay cuts?’

Because the haves have a moral obligation (a foreign concept to you Americans, I know) to the have-nots.

Or has the past nine months given you even more confidence in your monetary system?

Wake up.

Posted by Travis Lyle | Report as abusive

Someone has to pay for the Harvard MBA’s exploitation of Ammerica’s free market system. We (People making less than $100,000 a year), ain’t got no more to give.

I think it’s a safe assumption that people in the higher tax brackets, as a general demograghic, are responsible for all the exploitation of our economy. One could go even further and single out the Harvard MBA types. You know, people who have the know how to find cracks and loopholes in the system. Someone has to pay for the toll that the corruptive element in America’s free market system has cost our society. The situation is near catastrophic. Rich people don’t seem to completely identify with that. We (people making under $100,000/year), ain’t got no more to give.

Posted by mike | Report as abusive