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Why Not Pay Higher Taxes?
Pajamas Media ^ | 11/27/2011 | Victor Davis Hanson

Posted on 11/28/2011 3:56:11 AM PST by IbJensen

The usual liberal complaint against the conservative opposition to higher income taxes is greed and the better-offs’ self-serving reluctance to pay their “fair share.” But while perhaps true in some instances, I don’t think that is an accurate writ against most of those in that now demonized $200,000 and above categories who resent forking over more. Rather, here are a random 12 complaints that I hear from those who become furious about preposed higher income tax rates:

1) The Entire Bite

The most common lament is that taxes are already too high for those who either chose not, or do not have the resources, to find loopholes. I know that pre-Reagan top-bracket rates were often between 70%-94%; but few paid at those rates given the myriad of former deductions. At first glance, 33-35% federal top rates do not seem that steep; but income taxes do not fall in isolation. Many of the higher-income payers are small business people and self-employed professionals, who pay 15.3% in FICA and Medicare taxes on a sizable and growing portion of their income. And that portion and the rate itself always go up, never down. In 2013 a surcharge will hit those in the now near “criminal” $200,000 and above brackets. Many of the top incomes (believe Sen. Schumer, not me) fall in high-tax states like New York and California, where state income taxes can hit 10%. Add in property taxes on homes and businesses, and it is not hard to envision a theoretical 50% + rate, or over half one’s income. So, the conservative asks, at what total rate would local, state, and federal governments be happy — 60%-70%-80% of annual income?

2) Inequality?

Liberals reply that income inequality is worse than ever. (Note here in their own lives they have no problem with other “merit”-based inequality: e.g., Why can’t Johnny Depp turn down a couple of roles so other less fortunate actors could star? Why doesn’t Cornel West at last break up his endowed mega-salaried professorship into three or four lectureships for the struggling part-timers? Why doesn’t Maureen Dowd go down to one column every other week to allow less compensated New York Times op-ed writers a chance to catch up? In other words, why not back off from the trough and let others have a go?) But back to income inequality: some of those figures are not just attributable to the proliferation of $200,000 orthodontists, but to factoring in the mega-fortunes of a Johnny Depp ($50 million last year in income alone) or a Warren Buffett. The onset of a globalized market allowed a new top bracket to make tens of millions of dollars, a world away from the lesser professional. There is no aggregate homogenous group of “the wealthy.” My big-farming near neighbor (500 acres in vineyard plus), who probably nets $300,000 on a rare good raisin year like this one, is a world away from the late Steve Jobs or the thousands of million-dollar-plus incomes in Silicon Valley. This incongruence is not a rhetorical point or special pleading, but evident through the president’s own rhetoric: “Millionaires and billionaires” is a deliberate attempt to weld two disparate groups together — one making 1000 times the other (if the president is talking of annual income), or one worth 1000 times more than the other (if the president is talking about net worth). But is the Menlo Park bungalow owner who teaches at Foothill College and might be “worth” $1 million (given housing inflation) really comparable to Meg Whitman? Mr. Obama knows that there is not enough of the 1% of the 1% to come up with enough revenue to cover his new $4 trillion in debt, but does he think that by going after the top 5% or 10%, well, there just may be?

3) Wise Spending?

Then there is the manner in which the collected money is spent. It is not true to say Great Society programs have not helped millions, but it is legitimate to ask “at what cost?” came the expansion from a safety net to a sort of guaranteed livelihood. The spread of food stamps to almost 50 million recipients, the increase in unemployment to 99 weeks, the plethora of housing, health, and education supplements — all that creates not just necessary charity, but a mechanism for millions to find an alternative lifestyle, where subsidies, occasional cash, off-the-books work, and “other” activities can supplant work. Mindless “Black Friday” splurging is not just done by the well-off. Once legitimate questions have simply became taboo: “Do you make enough to support that additional child? Do you really think you needed to buy that flat-screen TV? Do you avoid alcohol and drugs?” To inquire like that is to earn liberal invective, but not to is intellectually dishonest. The number of generally fit men my age (e.g., 58) in my small community that, I know personally, are not employed full-time, and have not been so for years, is in the dozens. They are not starving. Obesity is the plague, not malnutrition, as the first lady understood.

4) Always More Spending?

Generally as revenues increased, spending on social programs and entitlements far outpaced them. We have almost doubled federal spending since 2000. Deficits widened despite (until the recent recession) constant annual gains in revenue. In the conservative mind, the higher the taxes, the more likely it is that millions will disconnect from the private sector and dream up ways of spending hundreds of billions on entitlements and billions on those who administer them. Whether the top rate is 35% or 50%, the deficits will probably be the same, given trends in spending. (Yes, I know a Republican Congress forced the Clinton administration to accept spending caps in exchange for higher taxes; but try that now [e.g. back to the Clinton tax rates and freeze spending at 2011 levels] and the deficit is still there.)

5) Less Efficiency?

Conservatives believe that they can spend their own earned money more efficiently than can unneeded (note that I say “unneeded,” because in every budget crisis, government threatens layoffs in fire and police first to scare the public into maintaining all sorts of social service agencies) state departments, whose employees are not subject to market forces and view yearly funded budgets as sacrosanct rather than predicated on a good peach crop, a fickle oil well, or uncertain demand for a vacuum cleaner. Millions of conniving minds figuring out the best way to save money and maximize profit have an efficiency that a monolithic centrally planning government octopus simply does not. Bigger government and higher taxes, whether in Greece or California, are not a prescription for economic growth that can best get us out of this deficit cycle.

6) Inequality by Income?

Not all conservatives believe “inequality” is definable by income alone. Does the chiropractor who makes $150,000 and sends his kid to Santa Clara University ($50,000 per year) on his own dime do all that much better than the DMV supervisor who makes $60,000 and has his child eligible for state and federal college grants? To the conservative, most (not all, to be sure) subsidies and breaks for college, housing, medical care, occasion debt relief, etc., are income adjusted and go to the lower and lower-middle classes. The subsidized housing tract 2 miles away from my farm has houses (ca. 1800 sq. feet) that are as nice or nicer than those in the old section of Palo Alto where I have 600 sq. ft. studio apartment. I imagine that the Selma counterparts also have an array of subsidies not extended to the upper-middle classes in Silicon Valley who are paying $1 million for an older and much smaller home. Income is not the only benchmark of poverty or wealth.

7) Psychological

Conservatives are also tired of being demonized. One “pay your fair share” is OK; dozens of “millionaires and billionaires” and other class warfare rhetoric become tiring. Psychologically, the top-bracket earner is now resigned to something like this: “The more I pay the more ‘they’ hate me, so why pay any more if the slurs will be the same either way?” Does anyone believe that should Obama get his new tax hikes, he will cease the class-warfare demagoguing as in, “Thanks to that noble 5% we finally balanced the budget”? (As opposed to, “Now that we have that problem of income tax hikes temporarily out of the way, we can go after….”)

8) Sic Transit Gloria

Income is not static. Most go in and out of top brackets, especially in non-salaried business. Many of the top earners tat I know are not salaried and were not making what they are now at 40 and won’t be at 65. They view their 50s as a brief window to store enough nuts for winter — a fleeting period in their lives when they are mature, experienced, still hale, and finally figured out how to make some cash for the less rosy future when they will be not so healthy or fortunate.

9) The Private HHS Department

Tax-resistant Americans also find ways to redistribute their money without government help. I know dozens who give far more to charities than do far wealthier liberals. I think statistics will back that up. Somehow paying the mortgage for a daughter, picking up the funeral bill for a cousin, loaning a brother-in-law cash for his business — all that never computes into wealth and poverty statistics, despite the fact that in every family there are “cash cows” whom everyone seems to approach for help (and they rarely go away refused). Is there a government form that asks of the middle class, “How much help, direct or indirect, have you obtained from a relative — parent, sibling, cousin, child — this year?”

10) The Technocratic Class

Then there is the class and cultural divide. Opening a bakery at 5AM for forty years or owning a fleet of semis is a constant headache in a way being the regional director of the Department of the Interior is not. By that, I mean it is far harder to net $150,000 in the muscular private sector than in the world of the tenured bureaucratic technocracy. If one reads the resumes of a Steven Chu, Hilda Solis, Eric Holder or Barack Obama there is a long government cursus honorum that almost ensures that none of these grandees has a clue how a business works or how fragile is expected income, how sure are expenses. So the technocratic class that soared to prosperity through government subsidies and employment is somewhat resented by the more conservative small business private sector that both supports it and so frequently finds itself on the receiving end of the latter’s disdain. The biggest myth is the prior Obamas’ boast of something like, “I could have made more in the private sector, but nobly chose to serve the community.” I doubt whether either Obama had the skill to soar in the corporate predatory sky. And why is it that the well-salaried bureaucrat always sighs that he could have made more in the private sector, as if he could have walked into a similarly tenured job at Exxon and would not have had to first hustle as a salesmen to earn what he does?

11) Politics

The 5% who pay nearly 60% of the taxes, while not monolithic, feel that they are pawns in a larger jaded chess game, in which the bishops and rooks have rigged the board: always higher taxes fuel bigger government, which fuels an expanding recipient class which pays homage by reelecting more big-government statists who further fuel government for sympathetic dependent voters. For the conservative, who sees dependencies and overregulation everywhere, each extra dime in taxes means more of what will turn us into a failed redistributive Greece. One group is expanding, the other shrinking in our Darwinian world of tax and spend.

12) Technology

Liberals talk as if we live in the world of coal-dusted Dickensian London and the Cratchits, or perhaps millions are still like the Joads putt-putting in smoky cars from Oklahoma during the Dust Bowl. Yes, there is poverty, but it transcends income, entitlements, and most of the rules of what used to apply in the pre-globalized world. My local Wal-Mart — in the poorest section of one of the poorest counties in a near bankrupt state — does a brisk business in new cell phones, DVDs, big-screen TVs, laptops, and discretionary purchasing. Black Friday was nightmarish when I drove by. When I was ten, few of the middle class had air conditioners; now most of the poor do, whether in their homes or cars. The onset of a billion new global workers, cheap consumer items, technological revolution, and government cash has meant that someone with a “below the poverty line” income can purchase cheap clothing and gadgetry that forty years ago were the mark of an aristocrat. The ability to call a foreign country on a cell phone for 5 cents a minute from the check-out counter never computes in any standard of wealth and poverty. In our world, it is “What THEY have,” not “What I have,” that counts.

The above is not a bold plea not to pay taxes, but a feeble rear-guard action to remind some why 50% of an income paid in assorted taxes is enough — and why more is not just unnecessary, but will more likely make things far worse. Had Obama been, even for a year, an electrical contractor or Starbucks manager rather than spent a lifetime in academia, community organizing, or comfortably employed by some sort of government, he would have had a different view of taxes and expenses. I might suggest from experience that I knew a lot of independent farmers who could have done graduate work at a Stanford or UC, but not too many Stanford Ph.Ds who could have run and survived on a 400-acre operation of cotton, almonds, and citrus.

TOPICS: Business/Economy; Constitution/Conservatism; Editorial; Government
KEYWORDS: evilregime; obamanomics; rich; taxes; vdh
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Which amendment to the constitution is the one that guarantees equal application of the law to all? Why does this not apply to taxation? Notice that it is the supreme court that would decide or in this case decide not to decide, a functionary of the national government in D.C.

As far as I am concerned the SC is virtually corrupt by virtue of living a privileged ivory tower life consisting of academic precedent and erudite views of society as if we were lab rats.

They’ll fiddle and do fiddle while the Constitution has become a suicide pact put on a platter and handed to the Third World and corporate interests.

1 posted on 11/28/2011 3:56:13 AM PST by IbJensen
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To: IbJensen

Folks that earn their money through hard work spend their money much wiser than some f-ing beaurocrat anywhere does.
Get your greedy hands out of my families pockets.

2 posted on 11/28/2011 4:00:28 AM PST by Joe Boucher ((FUBO) obammy is just a quota boy)
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To: IbJensen
It the way of Socialism. Demonize the producers and create a majority of those who live off the producers. I lived in Britain a few decades ago. People would ask me ‘what's the biggest difference between the USA and Britain’? I would answer ‘in America when someone is successful, people will look at them and think “wow, if he is successful then maybe I can be successful, too” ‘BUT 'In Britain when someone is successful, people look at him and think “why does he have all that, he doesn't deserve it” ‘. We have now become Britain. I love Britain but their Government and much of their culture is NOT what we want here. Socialism is a VERY unhappy place to be if you work hard and want to enjoy the fruits of your own labor.
3 posted on 11/28/2011 4:15:16 AM PST by originalbuckeye
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To: IbJensen

The 16th amendment has failed in its purpose of funding government functions. Best it be rescinded. It was a big mistake!

4 posted on 11/28/2011 4:15:38 AM PST by muawiyah
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To: IbJensen
bump for future reference

This is an excellent short summation of the anti-tax position.

5 posted on 11/28/2011 4:19:33 AM PST by sphinx
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To: IbJensen
It never gets much print space or air time, but one thing that has always bothered me is paying taxes on overtime work.

If taxes could only be charged on no more than 2080 hrs a year people would learn the value of work.

The guy that makes 100k working 3000 hrs shouldn't pay as much as someone making the same for 1800 hrs.

6 posted on 11/28/2011 4:34:21 AM PST by Beagle8U (Free Republic -- One stop shopping ....... It's the Conservative Super WalMart for news .)
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To: IbJensen

Because there is never anything to show for it.

7 posted on 11/28/2011 4:40:31 AM PST by jersey117
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To: IbJensen

People vote for the Democrats because regardless of ideology, it costs them nothing. Most people don’t pay taxes so there is no reason NOT to support expanded government along with spending, etc. The very few who do pay most of the taxes derive no real benefit from those programs and pull the cart every one else is riding. And the rich are predominantly liberal these days, so they don’t seem to resent the tax burdens they shoulder. Republicans should defending the rich, almost all of whom never vote for them anyway.

8 posted on 11/28/2011 4:45:13 AM PST by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: IbJensen

Excellent article. I am always amazed that in a relatively short time in history, we went from folks who walked and rode a horse across this country in order to fin a new land and better themselves to a class of people camping in parks, destroying what tax dollars built and demanding that they be given more of what someone else worked for.

9 posted on 11/28/2011 4:57:29 AM PST by midwyf (Wyoming Native. Environmentalism is a religion too.)
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To: IbJensen

Democrats dislike and distrust the private sector and think that creating government jobs that are worthwhile and pay well is better than “unleashing” the private sector. They believe the private sector is driven by “greed” and it exploits workers and consumers. They believe we need big government and lots of regulation to counterbalance and outweigh the power of the rich and the corporations—plain and simple. They believe that “supply side economics” causes booms and busts and ends in depressions-—that low taxes cause the economy to “overheat”-—and Republicans are unable and unwilling to argue with Democrats head-on and persuade people why Democrats are wrong.

In 1992, you had Bill Clinton running on middle class tax cuts but never delivered and it wasn’t held against him because inflation was low and gas price fell under 1 dollar a gallon in 1998, the year the budget got balanced. Clinton said he wanted to “balance the budget, but not on the backs of the poor or middle class”, but then he ended up cutting the capital gains tax in 1997—which was supply side....and soon Greenspan was warning about “irrational exuberance” in the Nasdaq-—but then cut the Fed Funds rate to help fuel the mania, then the Nasdaq crashed in 2000 from 5,200 to 2,400 in Clinton’s last year because Greenspan raised the Fed Funds rate to 6.5%.

Ross Perot got 19% of the vote/independent vote—calling for a 50 cent gas tax to balance the budget because the deficit was the biggest concern in 1992......and H W Bush ran on his record, which included a tax increase on the rich.

Republicans have done a lousy job of educating the public and pointing out the error of Democrat ways. They are running against a president some people really would like to want to vote for again, even though the independent vote is tilting against him-—it’s Obama who is pushing the middle class tax cut and Republicans are pushing for more tax cuts for everybody against future spending cuts—some of them highly unpopular.

Reagan raised the Social Security tax so high that it ran revenue surpluses for 30 years and created the “trust fund” that Republicans now are saying is “broke” and we cannot afford to pay it back. In other words, Reagan made the middle class OVERPAY Social Security for 30 years leading to the Boomer’s retirement and both parties are unpopular and have dug themselves deep graves.

When Bill Clinton said he wanted to balance the budget, but not on the backs of the poor and middle class, it was Reagans gas tax and SS tax increase he was referring to-—and it doesn’t make one a “rino” to understand the political thinking of everybody who is running for office on all sides.How can you win if you don’t listen to the other side and understand what people believe or be able to explain and defend your own beliefs.

Democrats believe that “profit IS greed” and they like the government created jobs because they seem worthwhile and aren’t for profit-—and they think that profit is a “necessary evil” as long as you have big government there to make sure that people don’t make too much profit——partly by taxing the hell out of it and spreading the wealth.

I NEVER hear Republicans defend private enterprise and fundamentally defend business earnings and profit. NEVER.

All taxes are taxes on TRADE....where both sides seek to “profit” ie, both the buyers and the sellers profit.

People trade money for goods and services or trade good or service or labor for money, ect-—and trades are equal. Taxes are a burden and a cost on all this trading-——and money comes from Fed Reserve controlling the growth of the money supply.

If the Republicans want to WIN, they must talk clearly about money and prices and inflation and deficits and give their side—argued by Milton Friedman—that it was mostly the FEDERAL RESERVE which caused the Great Depression and all the “demand side economics” in the world did NOT work to get us out of the Depression until the Fed doubled the money supply to fuel the war machine after 1941.

Reagan introduced the idea of “supply side economics” in 1980-—but in 1979 the Democrats POLITICIZED THE FED by passing a law creating a “dual mandate” for the Fed to strike a balance between inflation and unemployment.

Thus did the Democrats anticipate Reaganomics by giving the Fed a “demand side” mandate to make Reaganomics fail, then claim that the Fed is infallible and beyond criticism. Republicans HAVE TO talk about the Fed and explain why overturning the dual mandate is NOT interfering with the “independence of the Fed”, but is returning independence TO the FED!!!!!

It’s the 1979 Fed “dual mandate” which creates the booms and busts and NOT supply side economics.

Republicans can make the argument that the middle class has overpayed for SS for 30 years and eliminate the cap on SS tax. I think we should cut the corporate income tax to 28% and eliminate the double taxation of dividends completely and put the cap gains tax back to 28%—exempt some income from it—and index it for inflation.

Cut today’s budget by 10% across the board——and index the gas tax for inflation-—and I think the business side of payroll taxes is the worst tax of all-—a tax on jobs and raises and wages. Give a tax deduction or even a tax credit against payroll taxes under the Clinton tax code and raise the standard deduction to minimum wage. That would give us the code that Clinton should have given us and takes away the pandering cuts by Obama and Bush.

Republicans should NOT be fighting for Bush policies because it makes them look like backward looking followers and ideologues and not forward looking leaders. So they are better off going back to the Clinton code and working from there.....maybe even getting the top two Clinton rates to kick in at $500.000 and $1 million instead of Clinton’s $250.000.

We’ve had 4 years of FAILED inflation causing “demand side economics” under Obama and Bernanke but the only money which has “trickled down” to the people is from higher prices-—just like in the 1970s.

If Republicans trashed demand side economics of the “1970s and the past 4 years.....including the 1979 dual mandate”-—then they might win converts.

Republicans should not demean all government jobs or the public sector-—just explain why big government is based on lies about the private sector and “profit”. Admit that the private sector isn’t all good either-—because it includes drug dealers and pimps.

But the public sector has become corrupt with unions and pork and vote buying and congressman have huge unaccountable and unknown staff members who write bills which become laws and who knows who is bribing or meeting with staff members of congressmen????

10 posted on 11/28/2011 5:11:07 AM PST by Beowulf9
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To: IbJensen


11 posted on 11/28/2011 5:14:00 AM PST by Incorrigible (If I lead, follow me; If I pause, push me; If I retreat, kill me.)
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To: IbJensen
The spread of food stamps to almost 50 million recipients, the increase in unemployment to 99 weeks, the plethora of housing, health, and education supplements — all that creates not just necessary charity

Right there is the problem. "Necessary charity"?

Money taken from tax payers and given to tax takers, is not charity, it's theft.

12 posted on 11/28/2011 5:17:01 AM PST by Graybeard58 (Of course Obama loves his country but Herman Cain loves mine.)
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To: IbJensen

It is idiocy to take money away from Warren Buffet so that Barak Obama and Steven Chu can invest it in companies like Solyndra. If Solyndra could have been profitable, Buffet would have invested. Berkshire Hathaway just invested $10 Billion in IBM, they have the more than enough to make the investments. Solyndra didn’t have the business, they only had Democrats that needed to be repaid.

13 posted on 11/28/2011 5:19:56 AM PST by ALPAPilot
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To: Beagle8U
In every job I've ever worked, most people knew exactly how much overtime they could work without bumping themselves up into a higher tax bracket for the pay period.

That was the only proof I ever needed that raising taxes disincentivizes work. "Sorry, I wish I could help you, but if I work that shift, they'll take it all out in taxes anyway."

I agree with you, BTW, but I doubt we'll ever see it happen.

Excellent column by VDH.

14 posted on 11/28/2011 5:25:41 AM PST by susannah59
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To: ALPAPilot

If the richest people in the world see nothing wrong with paying more taxes, that’s their decision. For the 60% who pay nothing in taxes, they’d probably welcome it.

15 posted on 11/28/2011 5:47:09 AM PST by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: goldstategop
the rich are predominantly liberal these days, so they don’t seem to resent the tax burdens they shoulder

My perspective is that the rich are in the same position as the poor - they don't pay taxes. I'm not talking about loopholes - we don't tax wealth, we only tax income (I'm not suggesting we start taxing wealth, BTW).

For those with wealth, income is an optional activity.

I find interesting that, for all the Democrats whining about "the wealthy", never have they suggested actually taxing wealth - they only want to tax income, thus helping to prevent those with high incomes (which normally would be a near-guaranteed path to at least some wealth) who are not wealthy from becoming so. Another reason why the wealthy support the 'rats, I suspect.

I'm sure the Democrats know that as soon as they suggest taxing wealth, they'll send their army of uber-rich, trust fund punks, celebrities and sports millionaires (and I suspect not a few tenured educators) straight into the arms of the Republican party.
16 posted on 11/28/2011 5:57:05 AM PST by chrisser (Starve the Monkeys!)
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To: chrisser

Wealth taxes are fairer than income taxes. When you are young and starting out, no assets like in my case, income taxes are a killer and it puts you on the treadmill. The income tax delays wealth accumulation.

17 posted on 11/28/2011 6:06:44 AM PST by central_va ( I won't be reconstructed and I do not give a damn.)
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To: IbJensen

I love VDH, but the short answer is simply “Because it will never be enough. The government could take every penny you earn and it would still never be enough.”

18 posted on 11/28/2011 6:12:44 AM PST by A_perfect_lady (Islam is as Islam does.)
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To: IbJensen

Why Not Pay Higher Taxes?

One simple reason
Higher taxes only help one special group of people. POLITICIANS

19 posted on 11/28/2011 6:13:51 AM PST by SECURE AMERICA (Where can I sign up for the New American Revolution and the Crusades 2012?)
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To: IbJensen

So the “not-so-super” committee was charged with reducing the deficit (over 10 years) by $1.2T. John Kerry, at the behest of Reid and Obama, walks in and says $1T of that amount has to be a tax increase or no deal. It was destined to fail. The remaining $200B, reserved for spending cuts, was a drop in the bucket compared to a $15T national debt. This is the same John Kerry who has no record of accomplishment in his life, just like Obama. That’s why he was put on the “not-so-super” committee.

20 posted on 11/28/2011 6:18:05 AM PST by OrioleFan
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