Wednesday, April 15, 2009

A Tax Day Rebuttal to a Pro-Tax Liberal

A friend of mine posted this Ezra Klein pro-tax rant on his Facebook page yesterday. I thought, in light of today's date (Tax Day!) it deserved a response from a conservative perspective:

  • Klein's chart is skewed. The income tax in this case is the most important rate to measure, because the payroll tax is capped and brings down the average and most of the gov't revenues come from income taxes on the top 10%.
  • Also, the chart should really compare share of income to share of taxes paid.
  • It’s also important to note that these other taxes (non-income) get returned as government services to lower income taxpayers at a MUCH higher proportion to their tax share (i.e. food stamps, Medicaid, social security, etc.).
  • This is not a zero-sum game whereby the poor must get poorer for the rich to get richer. As JFK said, “a rising tide lifts all boats.”
  • A broad-based tax system is important to our society. If a majority of Americans have no stake in the system, it will always be easy to demand more and more spending without ever having to pay for it. At some point, you start choking out the capital that is used to create jobs in the first place.

3 comments:

  1. to address your points on this day of teabagging, here's some follow-up tax "rants" from my boy, ezra:

    http://www.prospect.org/csnc/blogs/ezraklein_archive?month=04&year=2009&base_name=day_of_1000_tax_graphs

    http://www.prospect.org/csnc/blogs/ezraklein_archive?month=04&year=2009&base_name=why_do_state_and_local_taxes_h

    while it's true that the poor get greater "returns" on their tax "investment" (via your examples above), there are MANY uncounted ways that the middle class and well-to-do also get such disproportionate returns. a classic example is the mortgage deduction, which will cost the feds $100B in 2009 (http://online.wsj.com/article/SB123569898005989291.html).

    plus, the whole POINT of a social safety net (and the resulting progressive tax structure) is to assist those poor people in this very way, and americans OVERWHELMINGLY support it.

    http://www.harrisinteractive.com/harris_poll/index.asp?PID=620

    i agree this isn't a zero-sum game, but the recent "rising tide" has gone to those in the top quintile at a much faster rate than those below. looks like the rising tide has only lifted the yachts.

    http://en.wikipedia.org/wiki/Household_income_in_the_United_States#Household_income_over_time

    i agree that at "some point, you start choking out the capital...", but we're not near that point. if so, then the reagan/GHB/clinton years (where rates were as high or higher as obama is now proposing) would have been pretty bleak.

    btw, americans are pretty happy with their tax burden, despite what the right-wing nut-job fox-sponsored teabaggers would have you believe:

    http://blogs.abcnews.com/thenumbers/2009/04/of-taxes-and-te.html

    ReplyDelete
  2. and to correct your post title, i am not a "pro tax" liberal. if we're being intellectually honest, there's no such thing as pro- or anti-tax positions: we all agree that we need to have a government that provides services, therefore we need to pay taxes. and i don't want to pay a red cent more than i have to in order to get the services i require or deem beneficial to our overall society.

    our real debate is over what services we should get from the government, not if we should pay for them or not.

    ReplyDelete
  3. here's a much better graph that illustrates how -- since the BCP*L was born -- the yachts have "risen" 23 TIMES more than the lowly dinghys.

    re: "If a majority of Americans have no stake in the system[...]"

    looks like we already have that. the rich get MUCH richer while everyone else has trouble keeping up with inflation and rising medical costs.

    click through to the entire report and further learn how, since 1979:

    - the top 1%'s share of after-tax income more than DOUBLED
    - the ratio of the top 1%'s after-tax income to the middle fifth's has increased from 4 to 23 times higher

    ReplyDelete