Tax the Rich? Well, Okay. Let's Start with Peter Orszag and His Revolving Door Friends

| April 11, 2011 | Reply

I’m not fan of tax increases, but I think I can get behind Glenn Reynolds’ plan.

A 50% surtax on anything earned within five years after leaving the federal government, above whatever the federal salary was. Leave a $150K job at the White House, take a $1M job with Goldman, Sachs, pay a $425K surtax. Some House Republican should add this to a bill and watch the Dems react.

I say we apply this immediately to everyone named in this profile of Barack Obama’s former budget director Peter Orszag. It is a Who’s Who of people who went to Washington, bent the Federal government to their whims, then hared-off to Wall Street to make hundreds of millions of dollars off the inside knowledge and the vast influence they gained while they were playing hairy mountain man to the people’s Ned Beatty.

All that money and influence-trading didn’t necessarily make them smart, though. Witness the closing paragraphs.

One cost of the vast disparity between the pay on Wall Street and everywhere else is that, all other things being equal, Wall Street gets more than its share of the good minds, and many of those it doesn’t control outright, it manages to influence—that’s the American system.

Orszag told me he doesn’t know yet how the system could change. His tenure at Citi, he said, may give answers. “Look, there is an ongoing debate. I don’t have the answer,” he said. “I’m going to exercise some modesty in terms of knowing exactly what to do about it. Over the next few years, I’ll have a better sense of how these incentives work.”

Even a man as smart as Peter Orszag may find it hard to learn that lesson in his current classroom.

Gee. Whatever could we do to ensure that people couldn’t leverage a small amount of money into an outsized amount of return money and power from the Federal government? That’s a stumper. Gosh, let me think on that a moment.

Well maybe — and I admit this is a crazy idea that certainly would never occur to the crazy-smart people like Orszag and his revolving-door buddies — we could take large chunks of the power the Federal government currently weilds and send it back to state and local governments. That way, a company like Citi or Goldman Sachs wouldn’t be able to target tens of millions of dollars and all its lobbying attention on only a few members of Congress or White House staffers. Those companies would have to spread things around 50 state houses and a few dozen city councils.

And, as a bonus, all the smart people wouldn’t simply run into the lucrative, good-old-boy revolving doors between Washington and Wall Street/K Street. You’d find them in Sacramento and Frankfort and Annapolis and Albany and in increasing numbers in the private sector, which would be more powerful and vibrant as it regained the primacy it once had when the public sector didn’t take such a large chunk of our money and time.

It’s an idea so crazy it just might work.

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Category: Political Pontifications, The Rise of the Nanny State

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