Though venture capitalist Tom Perkins has backtracked from an over-the-top Wall Street Journal letter comparing the tax treatment of America’s highest earners to Kristallnacht, he’s still disturbed about policies targeting the “1 percent,” as he explained recently to Fortune magazine.
Ultimately, the biggest issue Perkins claimed to have with the treatment of the 1% is taxes. “I wouldn’t say taxation is a form of persecution,” he said. “But the extreme progressivism of the tax system is.” He cited statistics about the tax contributions that wealthy Americans make — including that the top 1% pays more taxes than the bottom 90% combined — and said that the top 1% is carrying the government. “Government is a giant beast that has to be fed, and it’s fed with taxes,” he said. “And taxes will go up and up and up.”
Perkins pegged the problem of the American taxation system on failures in social, fiscal, and monetary policy. The income gap has roots in the War on Poverty, Perkins said, which he wished “had not been such a fiasco.” He blamed Lyndon B. Johnson’s social programs for an increase in out-of-wedlock birthrates and low-income single parent households. Fiscally, Perkins said that the government spends too much money on entitlement programs, an issue highlighted by the debt that the U.S. accrues as a result. “We’re on a knife edge with this incredible debt that can’t be paid back,” Perkins said. Finally, Perkins’ views on monetary policy were that historically low interest rates have led to a boom in tech startups. Which, according to Perkins, is a bad thing. “An incredible amount of money has flowed into venture capital,” he said. So, when students drop out of college and move to Silicon Valley to start companies or design software, “There’s so much money [in Silicon Valley], that they can keep failing and failing, so they aren’t learning in college anymore.”