Bill Koch's Wild West village tells us all we need to know about taxing the rich

It's a simple question: would you prefer lasers or a Wild West gated community?

The Denver Post brings us the news that Bill Koch – one of the Koch brothers, the right-wing billionaires who are trying to buy the American political system as though it were just another corporate acquisition – is recreating a 50-building old West town on his estate.

Nancy Loftholm reports:

There's a new town in Colorado. It has about 50 buildings, including a saloon, a church, a jail, a firehouse, a livery and a train station. Soon, it will have a mansion on a hill so the town's founder can look down on his creation.

But don't expect to move here — or even to visit.

This town is billionaire Bill Koch's fascination with the Old West rendered in bricks and mortar. It sits on a 420-acre meadow on his Bear Ranch below the Raggeds Wilderness Area in Gunnison County. It's an unpopulated, faux Western town that might boggle the mind of anyone who ever had a playhouse. Its full-size buildings come with polished brass and carved-mahogany details and are fronted with board sidewalks and underpinned by a water-treatment system. A locked gate with guards screens who comes and goes.

As Matt Yglesias points out, this is pretty close to the best demonstration of the declining marginal utility of wealth there could be. He writes:

As people get richer and richer, it gets harder and harder to think of cost-effective ways of spending the marginal dollar on amusing yourself. When you take from the rich and give to the poor, you end up generating a lot of extra welfare as people who don't have very much can have their lives greatly improved at relatively low cost.

Money is literally more useful in the hands of the poor than in the hands of billionaires. If someone is struggling to afford enough food to survive, you can vastly improve the quality of their life by giving them enough money to buy a loaf of bread. But while it's possible to imagine that life gets noticeably better when you trade your first class plane tickets for a private jet, the amount of money it requires to get that improvement could make an equivalent difference in the lives of many more people who can't afford air travel.

This is basically the justification for progressive taxation. At a certain – relatively low – level, the discrepancy in marginal utility of income is high enough that it is prima facie just to redistribute. If a marginal pound can do 100 times as much good in the pockets of someone on the minimum wage than in the pockets of someone on £1m a year, then there needs to be a very good reason why it shouldn't be transferred from one to the other.

Thankfully for the millionaires, there is: incentives. The amount of wealth in the world at this very moment isn't the only important thing to take into account; the other is where extra wealth is going to come from.

The facile claim that lies at the heart of the Laffer curve is that, if marginal tax rates are 100 per cent, people won't bother working. So if we try to apply our naïve redistributionism to the real world, we would end up taking most of the wealth of the developed world and sending it overseas, which would most likely end up in the global economy shutting down; not the best outcome for anyone.

If we just ended there, the analysis would be little deeper than the most thought-free attacks on socialism.

But in fact, there is more to say, thanks, again, to the Koch brothers. Just as they demonstrate the existence of declining marginal utility of wealth, they also demonstrate the existence of motivations for work beyond mere wages.

The Kochs don't work for money: they work for influence. Money is a useful means to that end, and it can also enable them to build crazy villages on their estates. But anyone looking at their actions can infer what they really want.

Similarly, do you think Richard Branson would stop Bransoning around (it's a verb now, look it up) if he made less money doing so? Or is he interested in fame, adventures and prestige projects as much as he is in earning his salary?

This is the reasoning behind the French finance minister's announcement two months ago of a potential salary cap for the country's state-owned companies, which include EDF, Areva and SNCF.

Certainly, no one questions the advantage of a salary cap when it comes to the very specific sector of "being a politician"; for all the acknowledgement that we need to attract the best candidates, it is understood that people become MPs for reasons beyond a desire for a good paycheck.

So why not cap salaries? Or, if that's too much, why not copy the lead of the 1974 government, and introduce an effective top rate of 98 per cent – a cap in all but name.

Such a cap would have a number of positive side-effects, including reducing inequality and ending the distortionary effect the "super-rich" can have on a community, but the main advantage it could have depends greatly on how organisations respond to it. If the wage-pool of the top executives were reduced tenfold, that money could be redistributed to other workers, which would be great, or it could be hoarded, which would be not so great.

But there is a third possibility. Yglesias suggests that extremely high marginal tax rates – which fill the same role as salary caps – were responsible for Bell Labs, the famous corporate R&D department which developed, amongst other things, radio astronomy, the transistor, the laser and UNX. [He wrtml):

If you're a corporate executive and you know that 90% of any additional income that you pay yourself is going to go to the federal government, suddenly using the corporate account to buy yourself fun new toys instead looks like an appealing alternative. And what could be more fun than a giant wacky research lab!

And presented as a choice like that, it suddenly becomes a whole lot less clear that high tax rates, at the very top end, are such a bad thing. Crazy gated Wild West vanity project, or lasers? I know what I choose.

Welcome to the Wild West. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Ariana and the Arianators: "We really are like a family"

The pop star provides her fans with a chance to express themselves joyfully - their targeting was grimly predictable.

Ariana Grande’s concert at Manchester Arena on 22 May began like any other. Children and teenagers streamed through the doors wearing pink T-shirts, rubber wristbands and animal ears (one of Grande’s signature looks). They screamed when she came on stage and they sang along with every song. It was only once the music had ended, and the 20,000-strong audience began to leave the venue, that the horror began – with a bomb detonated at the main entrance.

The show was just one date on Grande’s Dangerous Woman tour, which began in Phoenix, Arizona in February, moved across the United States and Europe, and had stops scheduled for South America, Japan, Australia and Hong Kong. (Since the Manchester attack, Grande has suspended the tour indefinitely.)

Since releasing her debut album in 2013, Grande has successfully transitioned from teen idol to fully fledged pop star (all three of her studio albums have sold over a million each) with a combination of baby-faced beauty and Mariah Carey-style, breathy vocals. Her most popular records are bubblegum pop with a Nineties R’n’B influence, a combination also expressed in her fashion choices: Nineties grunge meets pastel pinks.

She entered the limelight at 16 on the children’s TV programme Victorious, which ran on the Nickelodeon channel, pursuing her musical ambitions by performing the show’s soundtracks. Many of the young people who grew up watching her as the red-haired arts student Cat Valentine on Victorious would become fans of her pop career – or, as they call themselves, the Arianators.

As she outgrew her child-star status, Grande’s lyrics became more sexually suggestive. Recent songs such as “Side to Side” and “Everyday” are more explicit than any of her previous hits. She has repeatedly insisted that young women should be able to speak openly about sex and feel empowered, not objectified.

“Expressing sexuality in art is not an invitation for disrespect,” she tweeted in December. “We are not objects or prizes. We are QUEENS.”

Grande also has a reputation as something of a gay icon. She has advertised her records on the gay dating app Grindr, headlined shows at Pride Week in New York, and released a single and a lipstick to raise money for LGBTQ charities.

Cassy, a 19-year-old film student and fan, told me the fanbase is “made mostly of young women from 14-23, but I run into guys and non-binary fans all the time.”

“It’s pretty well known that Ariana has got a LGBTQ+ fan base. She’s so outspoken about it and that’s what draws us to her. Because she’s accepting of everyone, no matter who you are.”

Like many child actresses-turned-pop star, Grande has a fan base skewed towards the young and female: teenage and pre-teen girls are by far the majority of her most dedicated supporters. A writer on the Phoenix New Times described the typical Ariana Grande crowd as “pre-tween, tweens, teens, young gay (and fabulous) men, moms with cat ears, and multiple candidates for father of the year”. The Arianators form tight-knit groups on social media. I spoke to several over Twitter after the attack.

Arena concerts, which often have more relaxed age restrictions than nightlife venues, have long been a safe space for children, young people and teenage girls. They provide a secure place for concert-goers to dress up, experiment, play with burgeoning sexualities, dance, scream and cry: to flirt with an adult life still slightly out of reach. Glitter-streaked tears stream down the unapologetic faces of fans touched by an emotion bigger than themselves. It is appalling, if grimly predictable, to see children, teenage girls and young gay men targeted by agents of regressive ideologies for expressing themselves so joyfully. On 23 May, Isis claimed the attack.

“I went to my very first Ariana concert on 9 April,” Cassy tells me. “It was one of the warmest places I’ve ever been. People were so happy, smiles just beaming from their faces. People were being themselves – if that meant showing up in drag, they did. It was such an amazing place to be.”

Andréa, a 17-year-old fan from France, told me about her first experience of a Grande concert. “It was incredible,” she said. “Everyone was so kind, excited and happy. We really are like a family.”

The fans are devastated by Monday’s bombing. Thousands of messages appeared on social media to commemorate those who lost their lives. “As an Arianator,” Alexandre, aged 16, told me, “I’m really sad and I’m scared.”

“We’re all taking it really hard,” Cassy said. “We’re a family and we lost 22 members of that family last night.”

Ariana began her gig in Manchester with the song that has opened every night of her current tour: “Be Alright”. In it, she repeatedly reassures the crowd, “We’re gonna be all right.” It’s a phrase that her fans are clinging to after the attack. So, too, are the lyrics of “Better Days”, by Grande and her support act Victoria Monét, which was also performed the night of the explosion. “There’s a war right outside our window,” the words go. “I can hear the sirens . . ./I can hear the children crying . . ./I’m hoping for better days . . .”

“It’s hit us all very hard because we’ve lost some of our own,” said one Arianator who runs a popular Twitter account about the tour. “People we interacted with on a daily basis. People that just wanted to have a night of fun. These are dark times, but we are looking forward to better days.”

Anna Leszkiewicz is a pop culture writer at the New Statesman.

This article first appeared in the 25 May 2017 issue of the New Statesman, Why Islamic State targets Britain

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