Taxing ‘the rich’ more not only wouldn’t work, but it’s not fair

By David McElroy · April 5, 2012

Almost any time when governments have financial problems, many people think the obvious answer is to “tax the rich.” They believe that if government would just get those nasty rich people to pay “their fair share,” there would be plenty of money to let governments continue their spendthrift ways. It’s not true and it wouldn’t be fair to try.

I’ve been thinking about this because of a recent episode of public radio’s “This American Life” called “What Kind of Country.” (Hit the link to listen. It’s worth hearing, even though they’re coming from a position with some very mistaken assumptions, in my view.) The episode is about the continuing debate between people who want lower taxes and smaller government and people who want higher taxes and bigger government. It tries to take a look at why both sides of the mainstream want what they want.

A recurring theme in such debates is the issue of whether higher taxes is the way out of government budget woes. Some people say they would be happy to pay higher taxes in exchange for better police protection or better services of whatever kind they happen to want. But there are two issues with that. First, those people are typically happy to say they would favor higher taxes because the taxes would fall most heavily on people other than themselves. (Those with lower incomes almost always think taxes should be higher on high-income people, for instance.) Second, people who know that a tax would hit them say that they don’t trust government to get it right. Even if they’re willing to pay more, they don’t trust the people in power to spend the money wisely.

But let’s ignore those little issues and just look at the math. Let’s say the federal government levied a tax of 100 percent on everything that everyone earned more than a million dollars. So if someone earned $10 million, the government would get about 35 percent of the first million, but all of the remaining $9 million. That means a person earning $10 million would give the government approximately $9.35 million. Isn’t that the dream of the “soak the rich” folks? Even if the feds did that, it would only raise about $616 billion — which is about enough to cover only one third of this year’s deficit. In other words, the debt would continue to skyrocket.

What’s worse is that if you knew government was going to take away everything you earned above a certain amount, why would you bother earning more than that? The incentive to work hard and become wealthy would fall, and fewer people would earn high incomes. That disincentive effect used to hit people in the past, when the top rates were in the 70s or so. The less you get to keep of each dollar you earn, the lower your incentive to work and take risks to earn more dollars.

And now let’s touch on the issue of why we discuss taxes in terms of percentages. Have you ever thought of that? Why do we discuss the cost of government in percentages — when we discuss the cost of everything else in dollars and cents?

Let’s say you went to buy a 2012 Honda Accord and the salesperson asked you your income. You tell him it doesn’t matter, because you’re paying cash. (Let’s ignore any financing, just to keep it simple.) But the salesperson says the price is different depending on your income — your ability to pay. If you have a high income, that car might cost you $90,000. But if you have a very low income, the price might be $2,500. And if your income is low enough, it doesn’t cost you a thing. The car is free.

If you’re a low-income person, you think this pricing scheme is a brilliant idea. All you want is your car — for little or nothing. But if you earn a lot of money, you would ask, “Why do I have to pay more — for the same product — than other people do? Why am I being penalized for being successful?” And the salesperson would say, “Oh, but it’s only fair to have people pay according to their ability to pay.” And you would rightfully say, “Why should I have to subsidize others who are getting the same thing I’m getting?” And you’d be right.

If anything else in our society were priced that way, we would rebel. We wouldn’t agree to that for cars or phones or loaves of bread — yet that is exactly the system by which we pay for the services we purchase from governments.

Government’s alleged reason for being is to provide services to us. We’re supposed to be paying for what we get through our taxes. But the system that calls for different people to pay differing amounts depending on their ability to pay — for the same government services — sounds a lot like the philosophy of a gentleman named Karl Marx, who penned these words: “From each according to his ability, to each according to his need.”

Whatever governance is in existence should serve purely to sell services to people who live in the territory where it “serves.” If there’s a defense provided, it benefits everyone the same. If there are “public roads,” they benefit everyone the same. If the services are for everyone, then everyone should share equally in the cost. If services don’t benefit all, the costs should be paid by those who benefit, not everybody.

The kind of taxation where everyone pays the same thing for the same services is considered bad today. It’s called “regressive taxation,” and somber people talk about percentages of income and how tax burdens hit “those least able to pay for them.” The “progressive taxation” that they favor — that almost everyone favors today — is just a fancy way to hide what’s really going on: “We’ll force productive people to subsidize everyone else.”

A system where the majority try to live at the expense of the minority not only can’t work, but it’s immoral. Even if you believe in some minimal state, understand that the progressive tax system is already at least halfway to socialism. It’s what the progressive left demanded for ages. It was adopted and it didn’t work. It’s never going to work. And it’s never going to be moral.

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If you have problems with high blood pressure, I’d like to encourage you to consider making serious changes to your diet. There might be some people who don’t have any choice but to start taking prescription medications for high blood pressure, but I’d like to tell you that I have completely eliminated my issue by eliminating all sugar and almost all carbohydrates. (A couple of months ago, my blood pressure hit 185/144, which was dangerously high — considered stage 3 hypertension.) By completely changing my eating habits, I’m down 22 pounds and my blood pressure is now in the “ideal” range — without taking any medication. In addition, I sleep better and I have more energy. Getting away from the sugar-laden mess that we generally refer to as “highly processed food” has been a life-changer for me. Now my challenge is to avoid slipping back into old habits — by eating in the dangerous ways that almost everyone in our society has come to see as normal.

When I first heard about this, I thought it must be satire. When I discovered it was real, I was appalled, but I still thought it must be a one-time thing from some nutty activist. But it turns out it’s the latest bit of pandering to a bunch of far-left activists who believe that a man can become a woman if he decides to claim he’s a woman. As everybody knows, men have prostate glands. Women do not. Period. End of story. Men can get prostate cancer. Women cannot. But political activists are so eager to pretend that a man claiming to be a “trans woman” is really a woman that they are insisting that “women” be included in public health messages about the issue. This is nothing but political virtue-signaling. If you’re a man, you know which parts you have. You know that you ought to be screened. Nobody is made any safer by dragging far-left gender ideology into simple medical reality.

Every time someone tries to tighten requirements around the use of absentee ballots, I hear screams from Democrats and others on the political left that such efforts are nothing but “suppression of black voters.” These protests have never made sense to me, especially because it’s never been a secret that absentee ballot fraud goes on all the time in certain areas. (Everybody knew it when I worked in politics.) The people who engage in such fraud are rarely caught — often because the local political establishment approves of the crime — but a Democrat who won a primary election in Clay County, Alabama, last year has pleaded guilty to this sort of cheating. Terry Andrew Heflin was running for a place on the Clay County Commission. He was caught ordering seven absentee ballots in the names of various voters and sending them to his post office box — after which he used the ballots to vote absentee for himself seven time. Did he have other people cast additional fraudulent ballots? We’ll never know. But in a primary in which he was able to win with only 141 votes, it wouldn’t take many fraudulent votes to change the election. The next time you hear “civil rights activists” claim that it’s just “voter suppression” to hurt blacks which is at the root of efforts to stop this fraud, remember Terry Heflin. If you care about fair and honest elections, ballot security and voter identity should matter to you.

A state legislator in Maine has been stripped of the ability to speak in the state Legislature — and her votes are not being counted on legislative issues — all because she made a truthful social media post. Rep. Laurel Libby (R-Auburn, Maine) opposes allowing boys to compete against girls’ teams in school athletics and she’s become known for making an issue of it. On Feb. 17, she posted on Facebook about a recent example that she found outrageous. She posted side-by-side photos of a boy named John who competed last year in a state track event and won fifth place against other boys two years ago — and a photo of the same boy (now called Katie) who won first place in the same event this year against girls. Whether you find this outrageous or not, Libby is clearly being honest and truthful about the objective facts of an issue of public importance. But the state Legislature censured her. Democrats decreed that she could not speak in the House and that her votes would not count on legislation — until she apologized for the outrage of telling the truth. She refused and her constituents have been unrepresented in the state House since then. The people who promote this ideology are out of touch with reality and won’t rest until they force the rest of us to join them in this delusion. But even if you agree with “trans” ideology, you should be appalled at this heavy-handed attack on political speech.

The late Steve Jobs was at the center of our culture’s transition from analog to digital. He co-founded Apple Computer. He led the team that revolutionized personal computing with the first Macintosh. As CEO of Apple, he led the development of the iPhone and later the iPad. You would think the children of such a man would be surrounded by technology. But Jobs and his wife Laureen didn’t let their children use iPads. Their home had few screens of any kind. Even though Jobs spent most of his time developing and selling Macs and iPhones and iPads, he was home with his wife and children for dinner when he was in town. The family ate together at a simple wooden table in their kitchen — and there were no digital devices or focus on popular culture. Instead, he’s said to have guided his family toward deep discussions of art, philosophy and education — with no iPads to be found. If the man who guided the development of such products chose a different path for his own children, does that suggest that his digital experience taught him that children need human connection, not screens? And does it suggest the possibility that we might be better off if we made the same choice for our families?

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