Thursday, July 12, 2012

A Little Truth about "Fair Share" and Taxes

The President has been talking again of raising taxes on certain Americans, in this case the "rich," as a way to close the budget gaps he and his predecessors created.  He hopes that we are too stupid to know that even if we took everything the "rich" owned, it wouldn't begin to pay off the national debt.  He hopes too that nobody reads Thomas Sowell's The Invincible Lie over at He talks constantly about the fact that the evil "rich" don't pay their "fair share."  It has become a democratic talking point.  He wants to position himself rhetorically with the poor...the little against the evil "rich" about whom he rails constantly, while taking campaign donations from those same evil rich folks.  This is known popularly as class warfare.  The pitting of one group against another.  Obama however, has a double whammy, since he can also play the race card, another form of class warfare.

But, is it really true that the rich don't pay their "fair share?"  What is their fair share, anyway?

Taxes, properly considered, are exacted from the population to pay for legitimate government services.  To be considered legitimate, a service must serve all members of the population being taxed, and everyone must have equal access to the services.  Thus, the national defense can be seen to protect everyone.  Everyone has equal opportunity to use the postal services, and the postal service serves everyone.  Having a stable currency, the valuation of which is a known quantity encourages interstate commerce, as do Federal highways.  There are, in other words, legitimate reasons for Federal taxes, but these reasons can be said to be few in number and discreet.

The income tax was introduced with the passage (many insist it was never truly passed) of the 16th Amendment.  People had been trying to go after income since the civil war, feeling that here was a lucrative source of new taxes that would allow them to expand government beyond the Constitution.  And so it has proven.  But it is also vastly unfair, Warren Buffet and Bill Gates statements aside.  The problem comes because people who make less than some arbitrary amount pay no income tax at all.  Above this arbitrary amount, people must pay a progressively greater rate as their income goes up. 

This progressive nature of the income tax is "unfair" by any reasonable definition of the word.  It is also unjust by any reasonable understanding of justice.  Of course the "rich" put up with this without complaining publicly because they have come to believe that they deserve it, like Stockholm syndrome victims. But the rich no more than the poor enjoy the benefits of a national defense, of stable currency, or Federal highways. They can afford it, after all, and it may give them a sense of nobless oblige. But they don't deserve such a sense. The progressive nature of the income tax is also, ironically, unfair and unjust to the poor. Don't laugh, just hear me out. Just as the rich don't deserve to carry around with them their sense of nobless oblige, so the poor don't deserve to carry around with them the sense of victimhood that paying nothing confers on them. They deserve the dignity that they pay too, even if it is a widows mite. There has been much talk of Neal Boortz's "Fair Tax," and I admit that it would be fairer than it is today, but if we just went with a straight percentage, that each person paid, with no deductions for any reasons, and no loopholes, that would be a healthy start.

What about the other side of the equation, the idea that government services should only be those services which benefit the public at large.  What about transfer payments from those who pay taxes, to those who don't.  What about subsidies to "Big Oil," to "Agribusiness," and bailouts to automobile companies and big banks?  Depending on which side of the aisle you sit on, you will likely be incensed about one of these, and sympathetic with the other.  But either way, you are wrong.

When government takes tax money (essentially at the point of a gun) and gives it to either an individual, or to a business, without getting an equal amount of goods or services in return, the transaction can be said to be theft.  If you were to go out and point a gun at someone and say "give me your money," and then turned around and give it to someone else, what would you call it?  Oh, it is often seen as somehow noble to play Robin Hood, but the fact is that you are committing theft.  Robin Hood, remember, only took from the wealthy what they had stolen from the people to begin with.  But here you are taking the legitimate wealth of others to make yourself look better in men's eyes.  Shame on you!  And it is what the government is doing when they make transfer payments to people and businesses, whether they call it welfare, or subsidies, or loans.  To make matters worse, they deny the poor the dignity of earning a living, and deny the business the satisfaction of making it on their own.

A leftists recently pointed that if I didn't agree with him, I was not charitable.  He stated that Christ admonished that "it is easier for a rich man to get into heaven that for a camel to pass through the eye of a needle."  I had to set him straight.  Jesus told the rich young man to sell everything he owned, give to the poor, and follow Jesus.  It was an offer of discipleship.  But it was too much for the rich young man, and he left.  After that there followed the quote above.  But note what Jesus did not say:  he did not say for Caesar to seize the rich young mans possessions at the point of a spear, and redistribute the proceeds to certain people to gain favor with the people.  Charity must be voluntary.  You must take it out of your own pockets, and give it freely.  What we have with the tax code is politicians giving out other peoples money for votes and favors.  That is not charity, that is just plain theft.

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