I’m not sold on it, but Cohn and Klein make their cases. Cohn’s basic argument is:
“I don’t like parting with my money any more than you do. But I like what my tax dollars buy. Public schools. Safe food and consumer products. National security. The post office. Guaranteed income and health insurance for my aging parents, plus (soon) a guarantee of health insurance for my immediate family.
I benefit directly from all of these programs. And I benefit indirectly from the stability they provide. Capitalism and democracy could not survive without a vibrant, activist government. Such a government costs money to run.
Klein makes the point that high taxes for the wealthy doesn’t equal economic stagnation:
It would be one thing, Levine says, if the economy had performed so much better after taxes on the rich were cut. But it didn’t. Some of the fastest economic growth of the post-war period came in the 1950s, when the top tax rate was above 80 percent. The slowest growth came in the 2000s, when the top tax rate was 35 percent. So the fastest income growth for the top 1 percent has come under the low-tax regimes, while the fastest income growth for the median American came when taxes on the richest Americans rose.
The fundamental question is who should provide social and healthcare security “WE THE PEOPLE” or “BIG GOVERNMENT”? The constitutional role of government is to protect (freedoms, general welfare, regulate commerce, and national security) not to provide (dependency handouts and subsidies). For the government to protect the general welfare of the people, it must regulate the economy with programs that assure freedom and equality. The bigger the government the more income (tax) is required thus government deficits indicate that government as grown larger than the economy can support; this means our government is no longer a “protector” but a “parasite”.
Our economy is an exchange of a limited amount of funds and talents many times each year, thus as the government (local, state, and federal) tax rates increase on each exchange, the total tax burden on the economy has exceeded the available funds and talents of “THE PEOPLE”.
Following Cohn’s logic about benefiting directly and indirectly from government services, what about half of all Americans who pay no federal income taxes? We’ve got a lot of free-loaders out there who like their services but don’t want to pay for them.
I’m not an economist, so I’m ill-prepared to say whether raising taxes on the wealthy results in economic stagnation. If Obama is at liberty to call Paul Ryan’s budget proposal “thinly veiled social Darwinism,” then I’ll take the liberty to call his Buffet Rule nothing more than Robin Hood politics. When he introduced the Buffet Rule last September he said it will “stabilize our debt and deficits for the next decade.” But here’s the math: the Buffet Rule that millionaires should pay a minimum of 30% would bring in $47B new revenue in ten years but Obama’s budget adds $6.4T to the deficit. According to one estimate, the money from the Buffet Rule would cover just 17 days of the increased deficit under the Obama budget. That reality makes Obama’s promise a lie in service to his class warfare rhetoric. Plus, the irony is that Warren Buffet would continue to pay lower taxes than his secretary under the Buffet Rule because all of his money is subject to the capital gains tax – just like Mitt Romney. So….what we’ve got here is a gimmick of the Left, designed for the Occupy Wall Street protestors and their sympathizers, who relish the thought of punishing the rich while the rich stay rich. Let it be known that Obama paid a tax rate of 20.5% – a lower tax rate than his own secretary.
Federal income tax isn’t the only way the government pays for the services it provides, not by a long shot.
Two short points: a) Just b/c I’m not paying income taxes doesn’t mean I’m a freeloader. I still pay sales tax, social security tax, medicare tax, etc. b) I feel like so much of current Republican thought hinges on us existing in some kind of idealized context in which inequality doesn’t exist. Because racism exists on an institutional level, we have affirmative action. The GOP calls that “reverse racism,” as if there’s a level playing field and whites are being penalized for being a statistical majority. Likewise on economics, they seem to believe that we all exist on some kind of level playing field in which we should all pay in. Have you looked at the stats on income inequality? I have a post going up tomorrow talking about it. If we lived in a country where the wealthiest people made 5 times more than the poorest, eh, no problem. Let’s all pay income tax. But when the wealthiest people are making 30 times more than the poorest, then they should probably be paying the income taxes.
I would pay higher taxes in a heartbeat, if the increase went to things like education, the safety net, and resource conservation instead of, say, balancing out tax cuts for corporations or fighting horrible wars. And I’m not wealthy– I’m in grad school.
I would also pay higher taxes on my investments in a heartbeat if it meant that millionaires whose income was derived from their investments would similarly be taxed at a more appropriate rate.