Last week, the founder and CEO of Interactive Brokers, Thomas Peterffy, explained, during an appearance on CNBC, his belief that America is well on her way to socialism. Peterffy's warnings come on the heels of his recent election ad, intent on cautioning voters against casting ballots for the party which would 'take away the wealth that helps us [the wealthy] take care of the needy". According to Peterffy, the America that regulates businesses, imposes higher taxes, and increases spending all in the name of social equality is ripe for a 'socialist takeover'. To his credit, the federal government has spent trillions over the last four years rescuing banks buried in debt, combating unemployment and has tried its hand at some regulatory reforms with Dodd-Frank and Affordable Care, but is this really socialism? How exactly do higher taxes on the wealthy set the stage for a socialist takeover, when nearly every social revolution in history came from the working class? Is Peterffy, an immigrant from Communist Hungary, even correct when he says socialism? At best, Peterffy's acusations boil down to yet another sad coloring of federal spending and regulation by a misstepping conservative playing the communism card.
The America Peterffy Believes In
During his interview, Peterffy stressed the upcoming election's impact on the development of socialism in the United States. He argued that the choice for voters was between a path of increased government influence over the economy through regulation and deficit spending, and a path that returns to the "American tradition of economic freedom and individual liberties." In his view, America has reached a critical turning point in its history, thanks to the increased dependency on federal entitlement programs and if Democrats win in November, more than half of Americans would be dependent on some form of government assistance by 2016, laying the groundwork for a 'socialist takeover'.
For Peterffy, a Democratic administration also means dramatic increase in taxes since the Constitution doesn't explicitly limit the government's ability to set income tax rates. The wealthiest Americans and corporations could see tax rates up to 100 percent which would catalyze the abandonment of businesses by owners, increase starvation, and prompt the formation of a police state. He dismisses the idea that corporate America hopes for a Republican administration because of the potential benefits of lower corporate and capital gains tax rates alongside less regulatory oversight from federal authorities.