My economic manifesto in response to a liberal column
December 30, 2003
This past summer you replied to a letter sent to you by my uncle. He was inquiring as to how your editorial board defines "wealth" in terms of income threshold, and regarding the appropriate levels of taxation. I took issue with one statement contained in your reply in particular, "but this country is based on those who can afford it most contributing to the national good." Where did that idea come from, and what sort of ideology does it represent?
Did you know that it was Karl Marx who canonized the phrase, "from each according to his ability, to each according to their need"? Sounds good, but in application it will guarantee that ability will diminish and need will increase. When the Pilgrims came to America they tried such a socialist system and almost starved to death the first winter. Why then should we encourage America to flirt with a water-down version of Marxist economics?
A few years ago, a famous ethicist, Peter Singer, suggested that there is enough wealth for everyone to live on $30,000 a year, so we ought to pool it together and divide it equally. Now that makes good fodder for elementary school mathematics story problems, but honest reflection tells us that if wealth were divided that way, the incentive to produce would not be commensurate to that same level of aggregate wealth.
I personally view a graduated income tax as immoral. Our Constitution forbade it, and as recently as the 1890's, the Supreme Court declared it unconstitutional. When Congress deliberated amending the Constitution in 1913 to provide for an income tax, the opponents cried that someday income tax could rise to a confiscatory rate as high as 5%! The proponents laughed at something so ludicrous, saying that there would be a revolt by the people before that would ever happen!
A graduated income tax system, assures the incumbency of self-interested politicians, who adjust tax rates, so that most people fall in lower tax brackets. They can then buy votes by using the tax revenues from the wealthy to pay for social programs that amount to throwing a bone to the lower income citizens. These programs perpetuate poverty and complacence, by placing an economic ceiling on the lower rungs. Laziness, economic fatalism and hopeless resignation is rife among this group. How much poverty has been eradicated since we started spending billions on great society programs? The 19th century French economist, Frederic Bastiat, referred to this process as "legalized plunder." We create an irrational climate of antipathy and a covetous spirit toward those who are better off.
You seem to think it is unfair that millionaires get their $30,000 and more, while those making less than $26,000 could get nothing. What you fail to point out is that those who received back nothing, were not paying any federal income tax to begin with, while the millionaire was still paying $350,000 after his reduction. This is no longer a tax cut then, but a new form of welfare transfer payments. Economists Thomas Sowell has said that more atrocities are committed trying to create an egalitarian society, then are rectified through such governmental benevolence. Look at James Madison's comments.
"...[T]he government of the United States is a definite government, confined to specified objects. It is not like the state governments, whose powers are more general. Charity is no part of the legislative duty of the government."
"I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents..."
A Christian paradigm would mandate that the duty to help the poor, is the responsibility of the individual, the church collectively and the not for profit charitable organization. True charity is both voluntary and discretionary in nature. Coerced charity is not charity at all. The need for government to fill these roles indicates the depravity of a society. Government is exceedingly wasteful. According to economist Thomas Sowell, some government agencies return less than one third of tax revenue collected as welfare benefits to the needy. Would you willingly donate to a charity with that sort of track record?
I find it interesting that the humanist worldview contends that "people are basically good," but then doesn't trust them to help their fellow man, thus we must create "tax and spent oligarchies" to rectify the problem.
There is also the macroeconomic issue. Since the top 10% pay most of the taxes, could we jumpstart the economy even if we gave everyone else all their money back? I doubt it. Bush's tax cut was probably too small as it is. I personally think that a consumption tax is a better vehicle for fairness, but that virtually any tax cut is a move in the right direction. I am getting only about a $1,000 a year out of this adjustment, so should I begrudge the guy getting back $30,000 of his own money? Why are we such a covetous people?
I have other issues I could present, but some of them are dealt with in another piece I have written, rebutting a guy who said Jesus could not have been a fiscal conservative.
Robert Meyer is a hardy soul who hails from the Cheesehead country of the upper midwest. Robert is known by his opponents as a "clever rhetorician" who often exposes the fallacies of knee-jerk arguments presented in local papers. Seeking to develop precepts for every aspect of life — based on a conservative Christian worldview — Robert often gleans inspiration from looking off his back deck, over the scenic Fox river and recalling the wise counsel of those who mentored him.
© Copyright 2003 by Robert Meyer
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