Yes, it's a tired phrase that you can't tell a book by its cover, but this work is a perfect example. Look at the plain dark brown cover with nothing but the title and the author's name on it. A typical textbook would look exciting by comparison. It's likely this book IS used as a textbook, yet inside lurks eye-opening information on that teeny tiny percentage of the population that has tremendous wealth and wants above all to protect it. How do they do it?
It's always been the case the the many are dominated by the few, but this book is not about the elite. The elite may be defined by education or political connection, celebrity or outstanding achievement in many areas. This book is concerned only with those who command vast material resources (wealth), who may or may not be involved directly in politics or any other area. Jeffrey Winters examines how this tiny fraction of the top 1% by wealth manages not only to keep it but to protect the income that goes with it.
So what you say? Of course the rich want to keep what they have.
But wait, how do they do it? Thus begins a wonderful story reaching back to ancient Greece and Rome. Winters has come up with a theory that covers the field of wealth protection.
Oligarchs (the supremely wealthy) can fight each other with hired armies as with ancient warlords or the Mafia. In this case the oligarch himself is armed and ready to fight if need be. This can be relatively stable but what if one warlord manages to gain supremacy?
In that case, it can become a "sultanistic" arrangement whereby one supremely powerful oligarch overawes all the rest but through his immense power can maintain order, giving and withdrawing favors to keep the second rank in line - thus protecting their wealth and allowing them to disarm. What follows is a detailed account of 20th century Indonesia, where General Suharto accomplished this very thing. But after decades of stability, it fell apart because of his one weakness. What was that? You gotta read the book!
Another stable system can be many unarmed oligarchs with a system of laws to protect their assets. Look to Rome where the contesting oligarchs as senators often were military leaders as well. Did you know there were strict rules prohibiting soldiers from appearing in uniform in the district of Rome? It was to keep someone from marching on Rome and taking supreme power. But it finally happened and Winters relates all kinds of wonderful details on how it did, including the murder of Caesar. Is this beginning to sound interesting?
What about the type of government? Does democracy tame oligarchs? We know it doesn't! It's a major assertion of Winters that oligarchy can live quite happily with any system that maintains order and does not deprive them of their wealth or their income.
Without a "sultan" or direct force between equals to maintain wealth, there must be a strong legal system, but not necessarily one that protects individual freedoms, only one that protects property. The example is Singapore, where the reader learns of Lee Kwan Yew, a remarkable man who would tolerate no corruption by oligarchs and had a government agency dedicated to going after them without prejudice if they tried to pull any funny business. It worked marvelously, but forget about freedom of speech and don't get caught spitting on the sidewalk! The beauty of the strong legal system is that oligarchs need not be armed or have hired thugs for protection. It's a good life for the multi-billionaires under the law, but now a completely different kind of army for hire is needed: the tens-of-thousands-strong army of wealth-protection paper-pushers.
This is a group of ordinary people, moderately wealthy at best, whose jobs are dedicated to figuring out how the ultra-wealthy can keep their income away from Uncle Sam. This army reduces the effective tax on the uber-rich to the same level as the average working person, or even to no tax being paid at all. The catch is - you have to have so many millions to spare to hire this army, that it isn't affordable for any but the richest of the richest. Thus is the tax burden passed down to the merely rich and even so far down as you and me. You'll get a nice history of our income tax to show how this came about.
Confused? Don't be. It's this simple. Suppose you make so much each year that you can hire the wealth protection army for 1% of your income. In return for that, they reduce your income tax to a few percent of your income or even nothing at all. So you have lost 1% of your income to the army you hired, and, say, 2% more in actual tax that the army couldn't finesse, instead of the 35% someone in the top tax bracket would pay without the services of the army. That means you have effectively lost 3% of your income. Someone who makes $25,000 a year will pay three times that percentage or more! This makes income tax regressive - the more you make, the less you pay as a percentage.
Have I convinced you that this book is anything but dull reading? There's so much to learn for all of us in this slim text that is a delightful blend of history, current affairs and economics.
Thank you for an education, Mr. Winters!