There’s an interesting exchange at Donklephant in which Alan Carl takes issue with the tax provisions of Obama’s proposed economic plan:
It’s quite easy for a family of four to make $200,000 a year and sink most of that back into basic expenses with only moderate indulgences. Raising their taxes would force them not to eliminate yachts (they don’t own any) or $1,000 a night rooms during Las Vegas binges (they don’t do that) but to live in a smaller home or, most likely, reduce their personal savings, putting less in their IRAs and education funds and the like so the government can have a bigger piece of the pie. That is not only unfair it’s counter to the very notions of personal responsibility.
The key problem with Obama’s and most other Democrat’s economic plans is that they see the wealthy and even the kinda sorta wealthy as undeserving of their income. [...] They should not be obligated to forfeit a larger share of their income simply because they’ve worked hard and become successful. Payments into Social Security are capped because payments out of Social Security are capped. Unless we’re going to start paying higher earners more in Social Security after they retire, it is profoundly unfair to ask them to bear a greater burden while they are working.
We can debate the appropriateness and effectiveness of higher taxes for the ultra rich, but penalizing families who make $200,000 a year places the aspirational cap extremely low. It actually creates disincentives for people to strive for higher incomes and penalizes hard working Americans who’ve done nothing wrong but make good choices and become successful.
I was about to post a response at Donklephant when I noticed someone had already made the same observation I was about to make, the punchline of which is:
Either you get out of Iraq and cut defense spending, along with reforming Medicare, medicaid, social security, cut aid to Israel, etc.
Or you pay higher taxes, there is no free lunch
I agree with Alan’s assessment—shifting the tax burden is counter-productive, and/or unfair. Unfortunately, the situation the country is, itself, inherently unfair. Any solution will likely be perceived by someone as unfair.
We have a problem in this country—we have a massive amount of debt, and commitments that the country has made to spend more money will only aggravate that problem unless something is done.
Over the long term, “something” needs to include a helluvalot of spending cuts and unwinding of past commitments, so that government’s need for revenue can be kept at a more sustainable level. Making sudden, immediate cuts probably would be rather damaging to the economy right now, and as a practical matter, political and social forces will limit the amount of cuts that can be made.
In the absence of cuts, additional revenue needs to be scrounged up from somewhere. In an ideal world, the country would win some ultra-ultra-powerball, or the folks responsible for the mess would be relieved of funds to pay to return the country to fiscal sanity.
However, the fact of the matter is that we, the voters of America, are responsible for the mess. We haven’t demanded fiscal responsibility from our elected leaders, and we’ve let them get credit-happy while being distracted by bread and circuses.
We need to clean up that mess. That clean-up is going to suck, and it’s going to be perceived as unfair by at least some groups, especially since the clean-up needs to be done in a manner that doesn’t damage the country’s prospects post-cleanup.
That limitation necessarily means that the burden is going to be borne by folks of certain income levels. And the folks who will feel that the worst are those who appear wealthier on their tax returns than reality dictates.
It sucks. It isn’t fair. But the sooner we accept that life isn’t fair, the sooner we’ll be done.