Microsoft Chairman Bill Gates' recent visit before a Senate committee investigating allegations of anti-trust violations has all the earmarks of the beginning of wealth extraction process, said McChesney, a former associate director of planning and evaluation for the Federal Trade Commission, who joined the Cornell law faculty this fall after teaching at Emory University's School of Law. According to recent reports, Microsoft has begun paying off. Indeed they are, McChesney noted. The process of rewriting tax law is one of the most blatant ploys used by politicians to increase their own wealth, he argued. Payments are made to politicians to avoid inflicting new economic pain or to obtain reform from painful provisions already in existence, in return for surrendering privately created wealth.
Payment is meant to keep what one has earned.
Politicians can use threatened tax changes to generate income for themselves, even when no change ultimately ensues. Such was the case, McChesney said, with the Tax Reform Act of 1986, which provided a big windfall for many members of Congress. California vintners Ernest and Julio Gallo faced losing hundreds of millions of dollars if a measure concerning generation-skipping transfer taxes was made part of the Tax Reform Act. Obviously, it was money well spent. The imposition of price-controls is another popular extortion threat used by politicians, McChesney said.