RG

Any conversation about taxes must begin with a conversation about government spending. Spending — not tax rates — is the true measure of the fiscal burden on an economy. Government expenditure as a share of GDP (IMF, 2025): China — 33% United States — 38% Russia — 39% United Kingdom — 44% Sweden — 49% By this measure, China and Russia are economically freer than most of the West. Now add context. The US carries roughly half of NATO’s entire defense bill. Russia is engaged in active hostilities. And still the burden on the US and Russian economies is lighter than Britain’s — in peacetime. You cannot discuss raising taxes before auditing the efficiency, usefulness, and justification of what is already being spent. Foreign aid, for example. Or programmes for penguins in Uganda. Only after spending is optimized — and society still considers something worth funding — does the second question arise: which taxes to introduce, which rates to change. That answer shapes incentives across the whole economy. Will the tax suppress investment or consumption? Will it push businesses to shut down or people to leave the country? What I have described is called sound tax policy. Proposing simply to raise taxes — on a group you conveniently don’t belong to — and agitating for it regardless of consequences is not tax policy. It is harmful activism.

For most of my professional life, I have been connected to agriculture. First I farmed. Then I financed farming — including building what became Europe's largest milk producer. Here is how I see it. A company produces milk and lists its shares on an exchange. Someone buys those shares, believing people drink milk and will drink more of it. Someone else buys the milk itself. If milk becomes unaffordable, sales collapse and the company goes bankrupt. So the company prices its milk above cost — but low enough that people can still buy it. Meanwhile, trading happens on the exchange. Small parcels of shares change hands. The price of the very last trade — even if it involved a single share — becomes the quote you see. And through speculation, that quote rises fivefold. Does this mean I, as a co-founder, could sell 5% of the company at that price without crashing it? No. Does it mean milk got five times more expensive and less affordable? Also no. So what does it mean? Three things. First: someone made modest money speculating with a small block of shares. Second: I acquired "wealth" that exists only on paper. It bought me nothing. I hold the same shares, sold none of them, and received nothing to spend. Third: a monetary bubble keeps inflating. The money printed by the Fed and the Bank of England — and multiplied by commercial banks through fractional-reserve lending (the Fed cut reserve requirements to zero in 2020; the Bank of England never had binding ones at all) — hangs over the economy like a giant sack. If a large share of this empty money, backed by no goods — no milk, no grain, no circuit boards, no wrenches — were not absorbed by stock speculation and real estate, it would instantly turn into consumer inflation. The economy's problems are not the mythical "rich getting richer." They are two things: we produce fewer goods than we could, thanks to a pile of absurd regulations. And fiat money is printed in enormous quantities, warping every market it touches. But that is too complicated, or too unpleasant, to accept. Blaming the rich is easier.