There is a curious trend at work these days, the rich are getting richer and the rest of us are not. I am not writing here to complain or to propose how to change this. Instead — because this is a conflict management blog — I would like to point out something about the conflicts that may emerge.
As the rich get richer, their political agenda will likely change. How? Well, the political agenda of those striving to get rich is to be pro-business. And of course, this is what you have heard form republicans. But once people are rich, they might lose interest in the race to the top. Instead of being pro-business, they are as likely to become pro-capital.
What does a pro-capital political agenda look like? Consider what the rich want most of all – a secure foundation to maintain and enjoy their wealth. This has many possible manifestations. One would be policies that retard protest movements and radical change. Another would be a dislike of capital gains taxes. Indeed, a dislike of progressive income tax in general. And of course, there is that damned inheritance tax.
But how to replace government income that would be lost if these taxes are to be seriously reduced? The Reagan idea was that a sudden explosion of business activity, unleashed from tax constraints, would generate more revenue. Well, whenever tried, this has not happened.
But how about this idea — introducing a national VAT? The rich can afford VAT. Hmmm … don’t be surprised if you start hearing more about the purported virtues of VAT.