Skip to comments.What Price ‘Fairness’? (Will an even more progressive tax code solve our debt problems?)
Posted on 11/20/2012 7:03:36 AM PST by SeekAndFind
Realistic Republicans understand that President Obama and the Democrats head into fiscal-cliff negotiations in a far stronger bargaining position now than in 2011. When voters were asked on November 6 whether they favored raising taxes to reduce the deficit, a total of 60 percent said yes (47 percent favored increasing taxes for those who earn $250,000 or more, and 13 percent approved tax increases for all).
So taxes will be going up. As a matter of political strategy not to say survival Republicans will have to agree to raise taxes on those defined as rich. Its more than just the exit poll on support for tax increases. Republicans must also contend with the Pew poll that asked who would be more to blame if a fiscal-cliff deal were not reached. Before a single meeting has been held or talking point fed to the press, 29 percent said theyd blame President Obama, while 53 percent said theyd blame Republicans in Congress.
President Obama sounds so reasonable when he asks for a balanced approach to deficit reduction. Whether the implied spending cuts the flip side of his balance will materialize is the great question.
Obama is the anodyne face of a leftist party a party perhaps best defined by newly elected Massachusetts senator Elizabeth Warren. Her speech to the Democratic convention in September was a protracted roar of grievance, a fulmination against the (imagined) entrenched interests who were rigging the system against the poor and the middle class.
Wow. A nation that is skating to the brink of bankruptcy because it spends so much on the middle class is whipped into a righteous frenzy about how rigged the system is toward the rich? As the Washington Posts Robert Samuelson wrote in April, 60 percent of the federal governments non-interest spending goes to transfer payments to the poor and middle class. Spending on the ten largest means-tested programs that is, programs for the poor has increased from about $4,300 per person in 1980 to $13,000 per person in 2011 in inflation-adjusted dollars.
The bill for this spending is disproportionately paid by the wealthy. The top 20 percent of income earners pay 70 percent of the taxes. Soon they will pay even more. If this is what happens when the rich rig the system, the poor and the middle class should beg them to keep rigging it.
The Democratic party is consumed by the insatiable appetite to make America more fair by which they mean taking from some to give to others. As noted above, the U.S. tax code is already steeply progressive. You neednt love the rich to understand that chasing the goal of redistribution rather than growth can result only in everyone becoming poorer.
Like many European social-democratic countries, the U.S. has gotten into trouble by spending far more than it collects in taxes. Andrew Biggs, Kevin Hassett, and Matt Jensen examined studies on how other nations have recovered from their fiscal improvidence. Looking at 21 countries over 37 years, they concluded that 1) effective resolutions are rare, only about 20 percent of cases, and 2) successful attempts to balance budgets rely heavily on spending cuts, whereas failed ones rely on tax increases. What about the balanced approach? On average, the authors noted in the Wall Street Journal, the typical unsuccessful consolidation consisted of 53% tax increases and 47% spending cuts.
Yes, taxes are going up, but lets remember, as we bow to the inevitable, that raising taxes on the rich will put only the most trivial dent ($80 billion, according to one proposal) in our trillion-dollar annual deficits. Thus is the great god fairness appeased while the demon debt continues to breathe fire.
The sane policy goals for a nation in the kind of trouble were in would be economic growth and entitlement reform. The progressive agenda, Richard Epstein writes in Why Progressive Institutions Are Unsustainable, supplies a one-two punch. First, it reduces the private sector by ill-advised regulation. Second, it imposes extensive and counterproductive programs of redistribution that cannot be supported by a stagnant economy and a shrinking productive wealth base. As that base gets smaller, the demand for a stronger safety net induces yet another round of transfer payments and makes the tax burden heavier and the rate structure more progressive. The new redistributive tax regime in turn exerts greater negative pressures on production levels.
And down we go. The worship of fairness is a death cult.
Mona Charen is a nationally syndicated columnist.
BIG GOVERNMENT IS CRONY SOCIALISM. DEFUND their collectives. DISMANTLE their collectives. DEPOPULATE them from the body politic.
Pay, pensions and perks of all legislators past and present rescinded for not reducing/eliminating the debt.
(...it is a moral crime to give money to support ideas with which you disagree; it means: ideas which you consider wrong, false, evil. It is a moral crime to give money to support your own destroyers. - The Sanction of the Victims, TOF, April 1982.7.)
That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.
live - free - republic
Men naturally rebel against the injustice of which they are victims. Thus, when plunder is organized by law for the profit of those who make the law, all the plundered classes try somehow to enter by peaceful or revolutionary means into the making of laws. According to their degree of enlightenment, these plundered classes may propose one of two entirely different purposes when they attempt to attain political power: Either they may wish to stop lawful plunder, or they may wish to share in it.
Woe to the nation when this latter purpose prevails among the mass victims of lawful plunder when they, in turn, seize the power to make laws! Until that happens, the few practice lawful plunder upon the many, a common practice where the right to participate in the making of law is limited to a few persons. But then, participation in the making of law becomes universal. And then, men seek to balance their conflicting interests by universal plunder. Instead of rooting out the injustices found in society, they make these injustices general. As soon as the plundered classes gain political power, they establish a system of reprisals against other classes. They do not abolish legal plunder. (This objective would demand more enlightenment than they possess.) Instead, they emulate their evil predecessors by participating in this legal plunder, even though it is against their own interests.
It is as if it were necessary, before a reign of justice appears, for everyone to suffer a cruel retribution some for their evilness, and some for their lack of understanding.
It is impossible to introduce into society a greater change and a greater evil than this: the conversion of the law into an instrument of plunder.
But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.
Then abolish this law without delay, for it is not only an evil itself, but also it is a fertile source for further evils because it invites reprisals. If such a law which may be an isolated case is not abolished immediately, it will spread, multiply, and develop into a system.
The person who profits from this law will complain bitterly, defending his acquired rights. He will claim that the state is obligated to protect and encourage his particular industry; that this procedure enriches the state because the protected industry is thus able to spend more and to pay higher wages to the poor workingmen.
Do not listen to this sophistry by vested interests. The acceptance of these arguments will build legal plunder into a whole system. In fact, this has already occurred. The present-day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it.
Frederic Bastiat 1801-1850 “The Law”