We’ve just had Equal Pay Day. Now another faux holiday is upon us: I am proposing we call it Willie Sutton Day. You remember Willie-the bank robber (this choice of names for April 15 will make more sense in a minute).
I do believe that we should all (except for the very, very poor) pay our fair share to Uncle Sam. But today most of us will send a far too large portion of our earnings to the IRS. It will help an already-bloated government beef up even more.
I’ve already recalled for you the shock expressed at my views about taxes when I helped teach a continuing class in suburban Maryland the other day. The students, mostly bright and apparently affluent, would agree with President Obama that the rich ought to be willing to pay more taxes. In fact, they’d probably agree with the president that most are just waiting to be asked.
There are two reasons I disagree: (1.) Earnings or inheritance belongs to the person who works or inherits. (2.) Nobody should be asked to make sacrifices that enable the government to do stupid things. Would you write a check for a charity that wastes money like the federal government? Wouldn’t you look around for a charity that was run better?
But the big joke on those who want the rich to pay more taxes is that ultimately the soak the rich ruse is a ploy to get them to pay more taxes. That might not be nearly as much fun as imagining that the rich are singing a happy tune as they write big checks today. The Wall Street Journal explains:
A dominant theme of President Obama’s budget speech last Wednesday was that our fiscal problems would vanish if only the wealthiest Americans were asked “to pay a little more.” Since he’s asking, imagine that instead of proposing to raise the top income tax rate well north of 40%, the President decided to go all the way to 100%.
Let’s stipulate that this is a thought experiment, because Democrats don’t need any more ideas. But it’s still a useful experiment because it exposes the fiscal futility of raising rates on the top 2%, or even the top 5% or 10%, of taxpayers to close the deficit. The mathematical reality is that in the absence of entitlement reform on the Paul Ryan model, Washington will need to soak the middle class-because that’s where the big money is.
Yep, first they came for the rich…
Consider the Internal Revenue Service’s income tax statistics for 2008, the latest year for which data are available. The top 1% of taxpayers-those with salaries, dividends and capital gains roughly above about $380,000-paid 38% of taxes. But assume that tax policy confiscated all the taxable income of all the “millionaires and billionaires” Mr. Obama singled out. That yields merely about $938 billion, which is sand on the beach amid the $4 trillion White House budget, a $1.65 trillion deficit, and spending at 25% as a share of the economy, a post-World War II record.
Say we take it up to the top 10%, or everyone with income over $114,000, including joint filers. That’s five times Mr. Obama’s 2% promise. The IRS data are broken down at $100,000, yet taxing all income above that level throws up only $3.4 trillion. And remember, the top 10% already pay 69% of all total income taxes, while the top 5% pay more than all of the other 95%….
So who else is there to tax? Well, in 2008, there was about $5.65 trillion in total taxable income from all individual taxpayers, and most of that came from middle income earners. The nearby chart shows the distribution, and the big hump in the center is where Democrats are inevitably headed for the same reason that Willie Sutton robbed banks.
This is politically risky, however, so Mr. Obama’s game has always been to pretend not to increase taxes for middle class voters while looking for sneaky ways to do it.
Unlike the affluent suburbanites in the continuing ed class, I don’t think it’s moral for the government to target the wealth of its citizens. Let’s get back to Willie Sutton. Walter Williams writes:
Do you believe that it is moral and just for one person to be forcibly used to serve the purposes of another? And, if that person does not peaceably submit to being so used, do you believe that there should be the initiation of some kind of force against him? Neither question is complex and can be answered by either a yes or no. For me the answer is no to both questions but I bet that your average college professor, politician or minister would not give a simple yes or no response. They would be evasive and probably say that it all depends.
In thinking about questions of morality, my initial premise is that I am my private property and you are your private property. That’s simple. What’s complex is what percentage of me belongs to someone else. If we accept the idea of self-ownership, then certain acts are readily revealed as moral or immoral. Acts such as rape and murder are immoral because they violate one’s private property rights. Theft of the physical things that we own, such as cars, jewelry and money, also violates our ownership rights.
The reason why your college professor, politician or minister cannot give a simple yes or no answer to the question of whether one person should be used to serve the purposes of another is because they are sly enough to know that either answer would be troublesome for their agenda.
I can give you a yes or no. My answer indicts the current crusade to take even more money for the government’s not necessarily great purposes. Williams concludes:
Unfortunately, there is no way out of our immoral quagmire. The reason is that now that the U.S. Congress has established the principle that one American has a right to live at the expense of another American, it no longer pays to be moral. People who choose to be moral and refuse congressional handouts will find themselves losers. They’ll be paying higher and higher taxes to support increasing numbers of those paying lower and lower taxes. As it stands now, close to 50 percent of income earners have no federal income tax liability and as such, what do they care about rising income taxes? In other words, once legalized theft begins, it becomes too costly to remain moral and self-sufficient. You might as well join in the looting, including the current looting in the name of stimulating the economy.
I am all too afraid that a historian, a hundred years from now, will footnote America as a historical curiosity where people once enjoyed private property rights and limited government but it all returned to mankind’s normal state of affairs — arbitrary abuse and control by the powerful elite.