Ramesh Ponnuru of National Review Online offers an excellent lesson in history and tax policy to a clueless California congressman. The politician in question quotes one of the progressives’ favorite historical figures but misses the mark in a significant way. In little more than 200 words, Ponnuru explains why the congressman’s cheeky comment fails to strike even a glancing blow on its rhetorical target. It’s a reminder to all of us to avoid citing historical authorities without a proper understanding of the actual history.
Representative Ro Khanna (D., Calif.) tweets:
“Peter Thiel is leaving California if we pass a 1% tax on billionaires for 5 years to pay for healthcare for the working class facing steep Medicaid cuts.
“I echo what FDR said with sarcasm of economic royalists when they threatened to leave, ‘I will miss them very much.’”
A few things about the FDR speech to which the congressman is alluding:
(1) FDR was taking a victory lap over the Great Depression — in 1936, eight months before the “recession inside the depression” would cause the economy to shrink by 10 percent.
(2) His prediction was that anyone who left the country to avoid high taxes would find other countries’ taxes worse.
“I shall miss them very much but if they go they will soon come back. For a year or two of paying taxes in almost any other country in the world will make them yearn once more for the good old taxes of the U.S.A.”
If Thiel were to move to, say, Texas or Florida, it is highly unlikely that it would make him miss California’s taxes.
(3) The California proposal taxes unrealized capital gains. FDR did not impose taxes on unrealized gains, and two years after his speech, he would (somewhat reluctantly) sign a reduction in capital gains taxes.
