“You could only make four pictures, and then you were in the top bracket. So we all quit working after four pictures and went off to the country.”–Ronald Reagan
In Hollywood back then, Reagan faced 90%-plus tax rates. Today in America, half of our tax-payers pay 96% of income taxes.
Just for the record, Reagan didn’t oppose those tax rates out of concern for the wealthy, as demagogues claim.
He thought it was morally wrong to punish work and achievement. He thought it hurt working people like the the studio best-boys and theater popcorn-girls. And at that end of the Laffer Curve, government-mandated unproductivity actually costs the government money, not unlike Teddy Kennedy’s tax on yachts; it didn’t hurt rich people a bit, but until it was sheepishly repealed, it nearly destroyed the craftsmen of New England’s boat-building industry, which had flourished for four centuries until do-gooder, know-it-all liberals came along.
And yet for an increasing number of Americans, tax season is like baseball season: It’s a spectator sport. According to the Tax Policy Center, for the year 2009, 47 percent of U.S. households will pay no federal income tax. Obviously, many of them pay other kinds of taxes — state tax, property tax, cigarette tax. But at a time of massive increases in federal spending, half the country is effectively making no contribution to it…
We are now not merely disincentivizing economic energy but actively waging war on it. If 51 percent can vote themselves government lollipops from the other 49 percent, soon, 60 percent will be shaking down the remaining 40 percent, and then 70 percent will be sticking it to the remaining 30 percent. How low can it go? When you think about it, that 53 percent of American households prop up not just this country but half the planet: They effectively pick up the defense tab for our wealthiest allies, so that Germany, Japan and others can maintain minimal militaries and lavish the savings on cradle-to-grave entitlements. A relatively tiny group of people is writing the check for the entire global order. What proportion of them would need to figure out the game’s no longer worth it to bring the whole system crashing down?
Rush Limbaugh even has a pie chart permanently on his website, making the same point.
Doc Zero mentions removing the vote from non-taxpayers–something like we had two centuries ago when only property-owners could vote. But he quickly dismisses that, and the real meat of his argument is this:
It’s not welfare, as conventionally understood, that is killing us. How much of that 47% who don’t pay income taxes are living in desperate poverty? The truth is that middle-class entitlements are the unsustainable tumor which fills the beds of Hospice America.
Social Security, Medicare, and now ObamaCare will swell to consume the entire federal budget, along with much of the wealth produced by the entire planet, within the next two decades. That’s the fearful nature of the deficit tornado spinning over Washington D.C. Charity for the destitute is not unsustainable, even when it’s pumped through the corrupt and wasteful digestive system of the federal government.
ObamaCare isn’t a system of health-care vouchers for the poor, financed by a tax on the middle and upper classes. It’s a complete takeover of the insurance industry, designed to ensnare both the middle and lower classes, with the ultimate goal of directly controlling fifteen percent of our economy. The old system of tax-and-spend welfare isn’t good enough for the Left any more, and the public long ago soured on it anyway. Both liberals and conservatives have always understood that massive entitlements for the middle class, such as the left-wing Holy Grail of socialized medicine, were the endgame. They only disagree in their perception of which game would be ending.
C.K. MacLeod disagrees:
I hate the…argument, and I tend to think that conservatives are fools to make too much of it. On the face of it, on the level of the real world shorthand takeaway, the argument seems to put conservatives on the side of higher taxes for some number between 0 to 100% of the poorer half of the population, and according to some species of a “fairness” justification. You guys sure that’s where we want to be?
Jen Kuznicki disputes MacLeod:
Tea partiers are concerned with the direction of the country, and people in my income range are afraid for their children. We always worked toward helping our children so they would have it better than us. It is as if the past 20 years toward that goal has just been flushed and now we have to scramble.
The taxation argument does not usually fly with lower income people, but the future of the country does, because no matter what you make, being an American is our first thought.
I’m not even sure there really is an “income” tax anymore; just taxes–and taxes and taxes and taxes. payroll taxes. sales taxes, gas taxes, cigarette taxes, alcohol taxes, real estate taxes, property taxes, telephone taxes, lodging taxes, state taxes, city taxes, estate taxes, energy taxes, etc. If you buy foreign, you pay a built-in VAT-tax. If you buy domestic, you pay a built-in lawyer-tax.
And then there are “fees”. and “licenses”. and “assessments”. and “costs”. and “permits”. and “penalties”.
There is certainly a blurring of the lines. The Feds keep funding more local education…and take more control. They vote for more Medicaid in Congress…but the states have to pay half the tab. Much of the Stimulus was federal spending for state and municipal union workers. The Stimulus also shored up state unemployment funds–although that may be fair, since the Feds wrecked the economy.
The Stimulus also enticed states to legislate more unemployment funding, even arrogantly ordering the balance of power between governors and state legislatures to be changed.
And even “dedicated” taxes are fungible. Al Gore’s Social Security “lockbox” is a notebook in the bottom of a file cabinet in West Virginia full of IOUs. The dedicated gasoline tax is merely transportation money Congress doesn’t have to spend out of general revenues.
Some days I wonder if Obama’s right; maybe it’s all just magic money. If so, the Welfare State is too stingy; if money is as meaningless as Washington acts, we should just give everybody a printing press and let them print their own money at will.
Or we could decide what is really important, make choices and find a reasonable way to pay for those choices. Because right now, we’ve decided everything is important and everything should be a government program and everything should be funded. Everything.
Mark Steyn, Doc Zero and Rush Limbaugh aren’t suggesting anyone’s taxes should be raised. Reagan’s answer to 90% taxation was not to raise other people’s taxes, either. Nor was it just to cut taxes.
It was to Stop the Insane Spending–because government–and liberals especially–have no internal mechanism that tells them where to stop.
That’s up to us.