Bill Koch, third and, I believe, poorest Koch brother, has a serious problem with wine counterfeiting. You see he buys vintage wine. You are unfamiliar with this problem? So was I. When I purchase wine, I am inclined to choose volume over quality. I would rather buy 4 OK bottles of wine for $20 then spend $20 for one good bottle. However Bill Koch is different. Way different. I mean way way way different. He prowls the auction houses looking for really good deals on vintage wine. He will spend hundreds of thousands of dollars for a bottle of wine.

Koch once bought 4 bottles of wine that were purported to come from Thomas Jefferson’s vineyards. He paid $400,000 for the 4, yes you figured it correctly $100,000 a piece for a bottle of wine. Unfortunately, the gullible billionaire discovered after purchasing the wine that the bottles were fake. Which is a little irritating because the only advantage, at least as far as I can see, from owning a bottle of vintage wine is, in fact, owning it. If it isn’t authentic, the taste of the wine hardly matters. Who wants to pay $100,000 for repackaged French table wine?

Well Bill Koch was, to say the least, angry and wanted to put a stop to these swindlers. Being a billionaire, he also had the resources to fight this important battle. He spent nearly $35,000,000 trying to stop these counterfeiters from continuing their fraudulent activities. He met with some success and now the FBI and the courts are bring these people to justice. Hurrah.

So if Bill Koch is using his own money to buy vintage wine and fight his defrauders. What business is of mine? Let me tell you.

There are people who believe that taking money away from the rich is preventing the rich from investing their money in things that will ultimately bring wealth to the whole society and lift poor people out of their poverty. If you tax this money then you are preventing these people from investing these poverty reducing business ventures.

I think Koch’s experience provides evidence that proves this thesis wrong.

Let’s start with purchasing the bottles of wine. The bottles were fake so the trickle down theory hardly is relevant here. There are no poor grape picker or winery workers involved in this story. There are some swindlers and some suckers but no one that is going to advance the cause of commerce.

Even if the bottles were authentic, taxing Koch and extra say 25 percent per bottle would not have prevented him from buying the wine. He still would have plenty of cash to spare on his vintage wine. The worst-case scenario is he might have to shave a bottle or two off the purchase but he can still afford to spend $100,000 on a bottle if he so desired. Again as these are vintage bottles, the grape picker and winery worker are long dead, so no real innovative ideas are thwarted here. If you want to shed a tear, it would be for the poor wretches who work at Sotheby’s.

Koch spends $35,000,000 dollars trying to find and prosecute these counterfeiters. Agreed that these are people engaged in a criminal activity and should be stopped. However the people who gain anything by stopping the counterfeiters are pretty much limited to private investigators and billionaires. This isn’t investment money for the development of commerce and industry. This is pure revenge on Koch’s part. He doesn’t like being swindled.

If, instead, the $35,000,000 were given to the worst welfare frauds in the country, the money would still be better spent. More electrical appliances, new cars, and new houses would be bought. More money would be put into the hands of people who would use it buying things that might stimulate the economy than, let’s say, a billionaire interested in vintage wine.