It’s time for someone to stand up for the beleaguered 1%, that overtaxed and ostracized minority feeling the ire of the public.
In an appearance on The Daily Ticker that would make Dagny Taggart proud, Forbes contributor Harry Binswanger accepted the … er, challenge. Binswanger, a disciple of the writer Ayn Rand, argued that people who make $1 million or more each year “are so valuable to society that they shouldn't pay any taxes,” according to the website.
Binswanger added the rest of America should “give back to the 1% by thanking them for their service to the country and rewarding them by exempting them from taxation.”
Calling entrepreneurs “mistaken” for sharing profits and paying workers more than they’re worth to the company, he said fair trade should drive wages and if workers don’t like it, they are free to go elsewhere.
Binswanger’s Ellsworth Toohey in the Ticker debate was none other than Henry Blodget, the journalist formerly at the center of the Merrill Lynch “POS” scandal during the dot-com collapse. Blodget was accused of fraud by the SEC in 2002 and he agreed to a permanent ban from the securities industry and paid a multimillion-dollar fine. He now heads Business Insider, and he wasn’t buying Binswanger’s argument.
In a follow-up piece posted to Yahoo! Finance, Blodget explained that Binswanger’s argument is the logical extension of that which many American entrepreneurs and investors make, which is that they are the country's job creators and therefore deserve almost all of the country's income and wealth.
“These ‘job creators,’” this argument goes, should pay their employees as little as possible and keep every penny of profit for themselves,” he wrote. “After all, they deserve it: They're the ones who ‘create’ the jobs that sustain the country.”
However, he countered this argument is both “startlingly selfish and economically wrong.”
“What actually ‘creates jobs’ in an economy is a healthy economic ecosystem, one comprised of entrepreneurs, investors, employees, and, critically, customers,” he argued. “Successful entrepreneurs do play a valuable and important role in this ecosystem: They start companies that develop products and services that people want, and they guide the companies that produce them.”
Entrepreneurs also provide the capital necessary for companies to invest in new products and services. But making the case for the worker, he noted that without talented employees who make a company's products and services and financially healthy customers who buy them, entrepreneurs and investors can't create any sustainable jobs.
“So to suggest that entrepreneurs and investors deserve all the credit or compensation in the economy is absurd,” Blodget concluded.
Check out the latest blogs on ThinkAdvisor.