The principle that Obama evinced, which most economists would regard as unexceptionable, can be traced to Adam Smith. In “The Wealth of Nations” (1776), his seminal treatise on capitalism, Smith wrote:
The necessaries of life occasion the great expense of the poor. . . . The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. . . . It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
Wednesday, October 29, 2008
Adam Smith on Taxation
A little tidbit from Steve Coll's New Yorker piece, "Overtaxed," reflecting on Joe the Plumber and the specter of socialism: