In an event entitled ‘the war on the 1%’ last week, venture capitalist Tom Perkins once more reaffirmed his belief that continuing taxation could lead to the extermination of the top 1% in society.
Discrimination of the 1%
The event itself focused on the issue of income inequality; an issue that has come to the forefront of political debate over the course of the past few years. As part of his speech, Mr Perkins reinforced his view that taxation was currently being used as a weapon against the rich in society; and against the 1% specifically. As well as this, he discussed in detail his opinions on a wide range of American governmental policy including both monetary and social policy.
Perkins Likened Persecution to Nazi Germany
This is not the first time that Perkins has courted controversy this year. In January, he wrote a letter to the Wall St Journal in which he compared modern taxation and persecution to the way that Nazi Germany treated the Jews. Referencing the Holocaust and Kristallnacht, Perkins was placed under immense pressure to retract his comments and apologise. He later did retreat his references to Nazi Germany, saying that the Holocaust was ‘incomparable’, but he stood by his comments on what he classed as the ‘demonization of the rich through taxation”.
“Taxes Will Go Up and Up and Up”
During his discussion at the event (and apparently keen to avoid a similar controversy), Mr Perkins stated that taxation wasn’t a form of persecution, but the progressivism of the tax system was. He was quick to point to the fact that the top 1% of tax payers pay more than the bottom 90% and, in his words, the top 1% were “carrying the government”. Perkins believes that, because the government are so reliant on the top 1%, taxes will “go up and up and up” leading to the economic extinction of the 1%.
Although many had predicted a volatile speech, few were unclear about just how volatile the situation could become and a number of venture capitalists were keen to separate themselves from Perkins’ remarks in advance of his speech.
Taking questions from an audience member, he was quick to state that he agreed with “the parallels” his Nazi analogy held because "the typical German had never met a Jew." Insinuating that the American public did not understand the contributions of the 1%. He was, however, quick to claim that there were still marked differences between his analogy and the current day situation as this is an “an economic extinction, not a physical one."
Overall, it is widely expected that Mr Perkins’ comments on taxation will have very little affect on the markets and American taxation policy. However, it will still be incredibly interesting to see if his thoughts are referenced in the upcoming FOMC minutes and Fed speeches.