Friday, December 3, 2010

The Bush Tax Cut Fight

This current flap over the Bush tax cuts, scheduled to expire at the end of the year, perfectly illustrates some of my concerns about government and democracy. CBS has just released the following poll on this issue:

A majority believe the tax rates should be kept lower for all people save those making $250,000 a year (or their businesses if they report those receipts). Leftist commenter Eugene Robinson argues in the Washington Post that Republican insistence on extending all of the tax cuts and making them permanent is some sort of unforgivable crime. Please, stop and read that article.

There are a lot of things wrong here, mostly due to faulty assumptions. For starters, the tax rate is not responsible for the debt. These tax cuts will not, and never will, increase the deficit. Tax cuts cannot do that, period. Surprised? Consider this example:

The government charges X tax rate and pulls in $1,000,000. It spends nothing. Total balance at the end of the year is $1,000,000. Now, assume that government gives the biggest possible tax break, 100% reduction. Revenue is now $0. No money was spent, just like the previous year. Final balance is $0.

Note, that is not debt. Tax cuts cannot cause debt. Only spending can cause debt. So, no, extending the tax cuts will not increase the debt; the spending that will occur over the next ten years will be responsible for that increase in our debt by $700 billion (roughly an Iraq War's worth).

Those unemployment benefits? That's spending. That increases the debt. Also, Republicans have said they would extend those benefits if the Democrats would reduce other spending (in particular, what remains of the failed stimulus package). But note how Robinson characterizes the tax cut: " Step right up, and we'll write you a check." No! That is not what is happening! Allowing people to keep the money they honorably make is not "writing them a check!" If I refrain from robbing you at gun point, I have not "written you a check."

Robinson's article should be a must read for everyone. The paucity of thought on the Left is on full display here. Unemployment benefits, which have already been extended to 99 weeks (nearly two years worth of money without a day of work to earn it), have a "big stimulative punch." Really? Our economy is anemic with unemployment at 9.8%. There is no stimulative punch; there never was. Rich people might put their money in a bank, but if our government was friendly towards businesses the rich might invest in them instead. That investment, in turn, can be used to fund new job growth, getting people off of that unemployment list in the first place and reducing the numbers who need handouts.

There are a host of moral and practical issues supporters of taxing the rich tend to ignore. Few people will actually articulate the reasons why the rich should be taxed more, but I will deal with the one's most commonly stated:

The rich don't deserve to be that rich: Prove it. Yeah, you heard me, prove it. Time for you to stop and think about what you are saying. These people do not deserve their money? How do you know what "they" "deserve?" Those are two big terms you have not defined. Do you actually know what "they" did to get that money in the first place? Do you even know who "they" are? If not, you are in no position to say "they" do not deserve their money; you have absolutely no information to go on other than the fact that those people do indeed pull in more money than you.

Of course, even if you had that information, you still need to tell me what criteria to use in judging what people "deserve" and what they do not. If you are going to use force to take away wealth from other people (that is exactly what taxation does), you have to create a pretty damn strong case to do so. I'm not even going to attempt to tackle this because I have never heard this argument made. Without it, the whole idea that rich people do not deserve to keep their honestly made money completely falls apart. I will await one of those 56% of Americans who support only increasing taxes on the rich to explain this to me rather than create a straw man. Who wants to man up and defend what is right?

Fun fact: it is conceivable that there are people in this world more productive and important than you. They are smarter, they work harder, they produce more happiness in this world, and that is why they are valued more than you are. Keep that in mind as you try to figure out what the hell "deserve" actually means in your mind.

The rich can afford to pay more: Point being? Not enough of a reason to take away from other people with the threat or use of force. You have to prove that what you are spending money on is good in and of itself. You also need to show why everyone shouldn't chip in equally on this spending project.

Inequality is a threat to our economy: Without inequality, there is no incentive to work hard. No incentive to work hard means no hard work. No hard work means no economy.

And I will end this rant wit this question: why do these people, who already shoulder the highest portion of the taxes paid in this country, deserve to be burdened with more of the cost of running government? The top 50% of Americans pay 97.3% of the taxes. Those downtrodden poorer 50% supposedly carrying this country pay only 2.7%.

It angers me that so many people in this country would turn on the most productive elements in society. Those who produce the goods and services that make this lifestyle of ours possible should be seen as heroes, not enemies. Their rights (including that of property) should be respected rather than treating these people as resources to milk for our own gain without any compensation.

The theme of this blog, of my political philosophy, is simple. Leave other people alone. Taking more from the top producers in this nation with the threat of force is not leaving other people alone. If you are not the omniscient Philosopher King (which you are not) and these people are not actively hurting you (again, they are not), you have no right in law or in morality to use force against them. The true needs of the state should be born with a sense of equity, so that all citizens have some skin in the game. If we all pay equally (at least as a percentage of income) for the spending, we'll be much less willing to have that government spending in the first place. But when there are people who stand to gain by increased government spending, who do not have to pay a dime for it, then they will eagerly support spending every last dime other people own. Since this wealth comes from the work of others, it is, in effective, an attempt to legalize robbery.

That can hardly be considered the hallmark of a just society.

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