Senator John Kerry, who will soon become secretary of state, is a tireless advocate of higher taxes while enjoying his multimillionaire wife’s multiple estates. In 2010, Massachusetts resident Kerry docked his new $7 million yacht in nearby Rhode Island in order to avoid paying about $500,000 in taxes to his home state. Should not Kerry have welcomed the chance to chip in half a million to an insolvent treasury, given his advocacy for higher taxes? Could Kerry not have purchased a smaller yacht for $4 million in order to budget for the necessary taxes? Gore, Obama, and Kerry, after all, tirelessly boast that the taxes they advocate would fall mostly on people like themselves — omitting the fact that, as we see from Kerry’s boat deal, Gore’s TV deal, and Obama’s adjacent-lot deal with Tony Rezko, politicians not only mostly live on the public dole without the expenses that the rest of us incur, but also have miraculous ways of avoiding the sort of taxes they harangue others about.
During the 2008 financial meltdown, Goldman Sachs was a recipient of federal cash bailouts. Recently its CEO, Lloyd Blankfein, wrote an op-ed in which he said, “I believe that tax increases, especially for the wealthiest, are appropriate.” Why, then, would Goldman Sachs rush to pay out $65 million in restricted stock bonuses to its own corporate elite in time to beat the new higher tax rates that began on January 1, 2013? Isn’t that inappropriate? What would have happened had Blankfein timed his op-ed for publication in early 2013 rather than November 2012, and also added “– and that’s why I am not rushing Goldman Sachs stock payouts just to lessen the tax burden on our wealthiest at a time of national insolvency.”
Secretary of the Treasury Timothy Geithner, who nominally oversees the IRS, did not just not pay his own taxes while advocating higher taxes on others, but found incredible ways not to pay what was due — avoiding payroll taxes, improperly deducting his children’s camp costs, and taking improper charitable deductions, improper retirement-plan withdrawals, improper small-business deductions, and so on. The question in Geithner’s case was not whether he had avoided taxes, but whether there was any category of taxes that he had not avoided. Perhaps the creativity by which Geithner avoided his own taxes was seen as an asset in finding new ways to catch other tax-avoiders.
What explains the hypocrisy of the new liberal aristocracy?
The medieval concept of offsetting your sins through public penance is back in play: The more loudly you talk about helping the proverbial people, the more you are allowed to live quite apart from them without guilt. Do not expect a garbage collector, in the fashion of the anti–Mitt Romney ad, to make a video complaining that the Obamas never ventured outside their coastal compound to compliment him on his work or just to chitchat. Al Gore’s lamentations for the polar bear allows him to try to finagle a $9 million tax savings. The money for Media Matters apparently offsets the fact that the speculations of a conniving George Soros once almost bankrupted the British small depositor and earned him an insider-trading conviction in France. Each speech blasting the uncaring Bush tax cuts translates into a hundred thousand less in taxes to be paid on your yacht.
To be cool is now not just to be rich, but to appear caring. Hollywood still seeks hundreds of millions in tax breaks unavailable to small businesses without shame because it is so manifestly compassionate. Occupy Wall Street does not camp out in Beverly Hills or Malibu, although the likes of Johnny Depp and Leonardo DiCaprio make more per year than do most Wall Street fat cats. The public wonders why Hollywood is so liberal — is it the Bohemian culture surrounding the arts? The natural creative temperament of actors? The Lotus-land surf and sun of the southern-California beach milieu? Perhaps. But penance plays a role as well. For the overpaid and pampered Hollywood movie star, calling for raising taxes, banning guns, ending global warming, and legalizing gay marriage means never having to feel too bad about living on the beach and making, under our capitalist system, more money in a month than do many Americans in a lifetime.
The growing size and clout of government, and its intrusion into globalized finance, also play a role. Former Obama OMB director and liberal Peter Orszag went on to a multimillion-dollar gig at Citigroup. He now writes warnings about the uncontrollable debt that he helped accumulate; would that he would sermonize about the incestuous revolving door that Obama pledged to end. Did he learn anything from Franklin Raines, James Johnson, and Jamie Gorelick, who occupied top spots at Fannie Mae in the Carter and Clinton administrations and who all walked away with millions while the federal mortgage-insurance corporation went insolvent? The problem is not just that none of the three did anything to ensure Fannie Mae’s viability, or at least to justify the millions that they took out, but also that none of them had a reputable record of banking expertise to justify their being hired in the first place. In short, there is just too much big money — and temptation — for even the most liberal class warrior not to cash in on his ample government contacts and influence.
All these paradoxes pose existential questions: Are the elite architects of high taxes and big government the self-interested and conniving who found the path to the good life through cynically embracing such ideas (ask Franklin Raines or Al Gore), or were they so rich to begin with as to be unaffected by the ramifications of their ideology — or both?
— NRO contributor Victor Davis Hanson is a senior fellow at the Hoover Institution and the author, most recently, of The End of Sparta, a novel about ancient freedom.