The Truth About Taxes, or, the Work of 1000 Leeches
“Tax policy” is one of those phrases that has a curiously amphibious effect. On the one hand, for most red-blooded individuals it cannot but act as a soporific: “Ah, tax policy, eh? Pardon me while I get the snifter refilled.”
On the other hand: for anyone in whom the instinct for self-preservation is still intact, the phrase must also act as an existential tocsin, eliciting for many something akin to the storied “fight or flight” response. In the age of Obama, “tax policy” is both a weapon and an excuse: a weapon in the war to create a more egalitarian — i.e., more impoverished and centrally regulated — society; an excuse to undertake all sorts of policy experiments in order to bring about this “People’s Republic” of utopia.
One of the most poisonous arrows in the quiver of the Obamacrats’ armory is the word “fairness.”
Steve Moore, in his brilliant new book Who’s the Fairest of Them All? The Truth about Opportunity, Taxes, and Wealth in America, says everything that needs to be said about the dishonest deployment of “fairness” by eager redistributionists who think political leadership means punishing success. And Cliff Asness, writing for the American Enterprise Institute’s online magazine The American, has weighed in to explain precisely what the Obama administration’s redistributionist campaign will mean for the rest of us. “The rest of us” — the 98 percent of those who will be affected by the new tax policies. “We Are the 98 Percent,” as Asness puts it in his title.
Read his column. It’s not just that Asness understands “the current tax rates cannot support the promises made to middle-class Americans.” Nor is it just that “you cannot pay for the Life of Julia, or any vision of a cradle-to-grave welfare state, without massive and increasingly regressive middle-class taxes.” All that is true, and Asness is right to remind us of it. At the center of the debate, however, is something that partisans of both sides tend to neglect when they do not seek actively to conceal it. Namely, that behind the back-and-forth about taxes is a deep question about who we are, about what our values are as political beings.
“The central issue of our time,” as Asness puts it, “is the debate over the size and scope of government.” That is to say, it is a debate over the size and scope of individual freedom, which is residuum left over after government has exercised its prerogatives.
Traditionally, what set America apart from the rest of the world on such issues was its explicit commitment to limited government. The powers vested by the Constitution in the federal government, wrote James Madison in The Federalist, are “few and defined,” concerned mostly with “external objects” like national security and foreign commerce, while those accorded to the individual states are “numerous and indefinite,” encompassing “all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.”
The reason for this division and curtailment of federal power, Madison argued, was that limited government and individual liberty went together. We wanted the liberty. Therefore we had to limit the power of the state.
It might seem as if I had strayed far from tax policy. I haven’t. The power to tax, said Chief Justice Marshall, is the power to destroy. Even more, it is the power to control. When we ask about what sort of tax policy we want, we are asking what sort of polity we want, what sort of lives we want for ourselves and our children. Again, Asness sees this with admirable clarity:
“Many progressive pundits are moving away from their traditional complaint that America’s tax code is too regressive, favoring the rich. They are starting to tell us, albeit only after an election mainly contested on these issues, the truth: to fund the European-style social welfare state which they advocate, we must tax everyone more.”
“A European-style social welfare state,” i.e., a government by appointed, not elected, bureaucrats who are accoutnable to no one but themselves and who preside over an atheistic, soft-totalitarian regime that is financed by debt and addicted to political correctness. Is this what we want? “Yes, obviously, for we just re-elected the most radical President is our history, someone who first came to office telling us he wanted to ‘spread the wealth around’ and that he didn’t like all that talk about ‘American exceptionalism.’ What else did you expect?”
Well, I am not quite sure what I expect. I do, however, know what I want. And I know that Asness is correct about the choice we face:
The choice the country faces is simple. We can have big government and the Life of Julia (at least for a while, but that is another essay), with everyone paying through the nose and the middle-class share of taxes rising not falling, or we can return to the American tradition of limited government, with everyone paying a smaller burden to the state, with relatively limited services for, and relatively light taxes on, the middle class.
Again, what we’re talking about is not just a matter of arcane tax policy. At bottom, it’s about freedom. “As a byproduct of this growth in the state,” Asness points out:
… [we] also suffer a terrific erosion of liberty, free-enterprise, and individual responsibility and initiative. … [A]fter we become fully addicted to the latest increase in big government, the bill will ultimately be presented to everyone including, and in all likelihood over-emphasizing, the middle class and the poor. The people who were promised they would be untouched will see the largest proportional hikes. That’s exactly what has happened in Europe. We have seen this movie before, but this time we don’t need subtitles.
In other words, if we told everyone the ultimate destination right now, the country would likely reject it. But if built up in this piecemeal manner with benefits up front and the bill presented later, it can become reality.
Friedrich von Hayek took a line from David Hume as an epigraph for The Road to Serfdom. It is seldom, Hume pointed out, that freedom of any kind is lost all at once. The policies of the Obama administration are like a thousand leeches scattered over the skin of the body politic. Each leech extracts only a small amount of blood. But put them all together and you have the recipe for serious enervation if not collapse.
Abuse of the word fair, in relation to taxation policy, is the politician’s main weapon in creating the new Western police states. I’ve written about it in New Zealand here:
http://lifebehindtheirondrape.blogspot.co.nz/2012/07/taxing-language-question-for-politicians.html?m=0
It’s not just taxes. There are those who promote a mind-set that wants and accepts limited freedom more taxes and greater taxation. Louis Michael Seidman (born 1947) finds the U. S. Constitution “evil.” He is the Carmack Waterhouse Professor of Constitutional Law at Georgetown University Law Center in Washington, DC, and a proponent of the “critical legal studies movement.” He has been corrupting and dumbing-down lawyers for decades.
I’ve come to loath the word “fairness” almost as much as “sensitivity.” It was all those undergraduates who did it for me, with their incessant protests about grades and work.
Hey, I’ve got an answer for almost everything.
“Sensitivity,” on the other hand, deserves an all-out thermonuclear attack. You’re on your own with that one.
A lot of people think government should do more until they see their own taxes going up – witness the sturm und drang from Obama supporters who suddenly saw their FICA “contribution” rise to the old levels in their first 2013 paycheck. You never saw so many “I really need that $xxx MORE than the gubbermint does” rants at one time in your life. To paraphrase the old Pogo line: We have met the rich and it is US!
Yes, but the GOP failed (as usual) to provide one of the best teaching moment opportunities they have ever had, and probably ever will have.
Probably because they were all for the SS tax going back up. One thing the Dim’s can depend on is using our principles against us, as well as a complete lack of PR skills and tactics.
The make us play by their rules and our rules, it’s time to stop worrying about the rules and try to win the game.
I don’t think the GOP is up to it quite honestly
Tax policy allows a Predator federal government, which is what we are now dealing with, to have effective control over the benefits of private property without formally confiscating ownership.
In these stealth moves in what were free societies, the statist function with an Orwellian name that sounds nice is always the way to ever advancing power. http://www.invisibleserfscollar.com/is-common-core-a-catalyst-to-dramatically-alter-system/#comments is a post I wrote using a quote from a professional development webinar for teachers. It explained that Obama’s education policies that were sold as creating consistency in content from state to state are actually about “second order changes” in student consciousness so they will have new ways of thinking and new behaviors.
The traditional line between authoritarian and totalitarian was the freedom to think and believe what you wish within the privacy of your mind. Between aspiring second order change and the actual social and emotional emphasis of the real classroom implementation with data being collected on each student to measure “change” in a Data Quality Campaign, that particular barrier is going down.
When you unite tax policy with the declared commitment to an Industrial Policy economy based on Sustainability, we are descending into unabashed Cronyism. Assets belong to the politically connected as will intact, well-stocked rational minds.
No wonder they are going after the 2nd Amendment.
Thank your this stimulating article. However, you write, “Traditionally, what set America apart from the rest of the world on such issues was its explicit commitment to limited government.” But this was also true of Britain.
A. J. P. Taylor’s famous book “English History 1914–1945″ begins:
“Until August 1914 a sensible, law-abiding Englishman could pass through life and hardly notice the existence of the state, beyond the post office and the policeman. . . . He had no official number or identity card.”
I think the difference is that England’s somewhat limited government arose from evolution, from the pragmatic give and take over a period of centuries. The USA’s founders benefitted from the enlightenment, and thus from actively researching what had worked and what had not worked, to the best of their ability and with the best resources they could find at the time. By applying all of that in more of a massive, one-time effort, and recognizing that amendment would be necessary, they took a leap forward.
Of course, the Scottish, British, French, Russian, etc., policy wonks observed and criticized based on what they knew and how they interpreted things. They inevitably rejected some things from the American Way that they should have adopted, and accepted others which didn’t work out so well in their context.
But, of course, we’ve seen similar quotes from about the same time, 1900, in the USA, lamenting the increased tendency of the federal government to take more power, to grow ever more corrupt, and to violate rights, including (most notably in light of your quote) the right to privacy.
In 1900, total federal spending up to that time was less than $17G. Birth certificates were not created or tracked in most states right up to then, and even in states which did create them, many parents and midwives and doctors did not bother. Driver licences were still tax receipts almost up to the 1930s, lacking name, descriptions, etc. Income extortion was an extreme leftist notion which had been hammered down several times. Socialist Insecurity Numbers were as yet a distant nightmare.
Our laws are supposed to be equally fair to all citizens. For example, whether one agrees with it or not, equality before the law is the basis of the argument for ‘homosexual marriage’ (an adjective is always required before this kind of ‘marriage’ because everybody knows the naked word marriage applies exclusively to a man and woman). But tax laws is this country are unfair with malice aforethought.
Politicians routinely and blithely punish some of their constituents and reward others on almost a daily basis somewhere in the country. This taxing and spending profligacy is one of the great flaws of lack in the Constitution. The founders should have paid a lot more attention to controlling the government’s taxing powers. If they could see our current tax codes, I bet they would be horrified at the arbitrary injustices.
The government and its laws recognize marriage as a binding legal agreement between two individuals and creates preferences and obligations for those who enter into such an arrangement. Getting married allows you to get tax benefits, health insurance benefits, co-mingles your assets and gives each party a claim on the fruits of labor of the other – possibly forever. Adding children into the mix complicates this even more. This is the most complex and far-reaching legal agreement that a person will ever sign on to in their life and yet it is done with absolutely no documentation and only minimal understanding of the laws and regulations that govern the arrangement. It’s nuts that you can be extricated from your mortgage because the bank robo-signed your 70-page document, however once you are “married”, you are trapped by an ever changing set of laws and tax/benefit scenarios.
The fact that this applies to only one type of 2-person arrangement opens a Pandora’s box of unfairnesses. But if I were not in one of the approved arrangements that binds the partied to such an all encompassing but poorly defined set of rules, I would not be so anxious to be placed therein – fairness or not.
Fred, yours is a “…forest for all the trees…” kind of comment. But for the sixteenth amendment – the linchpin for the entire progressive agenda – there would be no inequity before the law on the subject of marriage. The premise of the income tax is that various levels of income, including the incomes of married couples, “should be” treated UNEQUALLY before the law. Roger Kimball suggests that the income tax, on which so much of the president’s policies rely, is a heaping handful of leeches.
You’re complaining about someone stealing the hubcaps after progressives have stolen the whole damn car.
Giving the elite hollywood multi-millionaires massive tax breaks is fair? This administration is about anything but fair. They are 100% about controlling every aspect of your life. If you make too much money in their eyes, they will confiscate what they want from you for distribution to their constituents. If you are their “buddy”, you can do as you please.
…tax laws IN…duh
One wishes that in a prior time, there was a constitutionally mandated maximum put on the tax rate with a x2 declared war exception – meaning congress has to declare war to beable to enact a law that allowed for a double rate. And lastly that all tax against income would be an income tax (ie no seperate fica and income tax)
Congress should work to aggressively close loopholes in the tax code.
Unfortunately, Republicans are not leading this charge because they tend to view tax loopholes as a fast one they pulled on the Democrats.
I should add that most tax breaks for the rich tend to benefit LIBERALS. Take charitable deductions. Rich people give money to liberal-controlled universities, liberal-controlled foundations, etc. If Republicans were SMART, they would be trying to stamp out the tax break for charitable deductions.
And take the deductibility of state taxes. This benefits high-tax liberal states like New York and California. That’s another deduction that Republicans would be trying to abolish if they were SMART.
Everything points to a VAT. It will be sold as the only realistic solution, just a couple of points to begin with, nearly painless.
Don’t forget that some shitheels (soros for example) always seem to position themselves to prosper when they help to destroy a country.
If this becomes a policy debate, liberty loses. We’ve already succumbed to the siren song of direct democracy. That is the nail in the coffin for us. The only way out is a constitutional convention and the only path is BACK to the original intent of the document. How to get there and do that; I don’t know.
Personally, I think we’re over the cliff on this issue; liberty. We now live as free as we do, as free as we will at the pleasure of a benevolent fascist government. We’re not a dictatorship, yet.
One of the most poisonous arrows in the quiver of the Obamacrats’ armory is the word “fairness.”
The GOP lost a prime teaching moment
Define fairness: is that when a successful person is punished and your paycheck goes down, or is that when you get to keep more of what you earned?
Or more succinctly this should have been the talking point for every GOP person in front of a camera.
When the Democrats start talking about fairness everyone better grab their wallets.
Then after the 2.2% raise on taxes every salaried person received we go back to this comment and explain it, when people are focused on it as real event, not some abstract concept.
Then use it again anytime the word “Fairness” comes up as in
The last time the Democrats used the code word “Fairness” we told you to check you wallets, you didn’t listen, and now your making less money than did before.
What’s the old saying “Fool me once shame on you, fool me twice shame on me” I guess we all need to decide if we are going to let them do it to us again etc.
This is not rocket science, it’s about manipulating public opinion in your favor and the GOP suck at it.
Then when the
Yes. Lower our taxes and at the same time, do away with any kind of “subsidy”. Then watch the price of gas explode, along with the prices of who knows what other commodities. Then watch the “lower-the-tax” people squeal.
As long as I can take any job I want, quit any job I want at any time, board an aircraft for any US destination or drive there, open any business I want, attend or not attend any church I want, marry whomever I want, say, print and publish anything I want, associate with anyone I want, read anything I want, and so on and do all these any myriad other actions without hindrance or even thinking about whether I can do them or not, then I am free. In most countries of the world…with the exception of maybe 2 or 3……most of these actions could not be done without some formality and intervention.
Taxes to me, are way down the totem pole. Our tax rates are so low as to be almost laughable. To me, they simply are not a “liberty” issue.
Can the President Raise the Debt Ceiling by Himself? Andrew Grossman November 28, 2012
http://blog.heritage.org/2012/11/28/can-the-president-raise-the-debt-ceiling-by-himself/