President Obama has once again proposed eliminating Bush-era tax cuts, this time for people who make over $250,000 a year. There’s plenty of room for agreement or disagreement. Yes, the government spends a lot more money than it takes in. You would too if you could print money legally. So increasing the government’s revenues would help the situation, but raising taxes on those making over $250,000 while it would increase revenue would not offset deficits. In other words, taxing the so-called rich would not raise enough to pay for all the things we’re already spending money on. Yes, many of the $250,000 income earners are small businesses that can create jobs if their profits aren’t taken in taxes, but have you seen the job creation numbers recently? Job creation is very slow. And yes, there are plenty of things you or I may think the government wastes money on, but your lists and mine are probably different and the federal government wouldn’t be spending the money if someone didn’t want it to.
Then, there is the question of whether $250,000 a year is actually rich. I’d certainly feel better off if my family income was that high, but I don’t think I’d feel rich; upper middle class, probably, but not rich. On the other hand, I live in one of the most expensive areas of the country, I have high property taxes, and a significant mortgage payment. If your house is paid off and you live in a low-cost-of-living area, then $250,000 a year would put you on easy street.
No matter how much sense I make, I’m not going to resolve the issue here, so I won’t try. It’s an issue that will be argued endlessly between now and the November election. What I am going to do is muddy the water because I can, by talking about the other end of the spectrum.
It’s already true that way fewer than half of the people pay more, way more than half the taxes. Is that fair? Well, way fewer than half the people have way more than half the money, so maybe. And those people with a disproportionate share of the money can use some of it to buy political influence. Some of them do just that. But the people who have less than half the money are in the majority, the overwhelming majority, in fact. And the overwhelming majority can vote for its self-interest if properly motivated. That’s why certain people are screaming about class warfare.
One statistic that has come up in the tax argument really troubles me. Only 51% of the people in this country actually pay any federal income taxes. A few of the people who pay little or no federal income taxes are rich. Most of their income comes not from salary, but from investments, and they pay capital-gains taxes, the theory being that low tax rates on capital gains encourage investment and investment encourages the economy to expand.
A lot of the people who pay no income tax at all are not rich by any means. Still, it disturbs me that almost half of the people don’t pay any federal income taxes. It would disturb me a lot more if more than half didn’t pay.
Paying taxes does make people feel more a part of the government and the overall society. Not paying taxes does alienate people from those feelings. We’re already at a point where far too many people feel civic virtue isn’t a virtue and that civic responsibility isn’t their responsibility. Someone go look up the contributing factors to the fall of the Roman Empire. You’ll come across the Latin phrase, “panem et circenses,” or its English translation: bread and circuses. I think we as a society are tottering on the edge of that cliff and I don’t want America as a society to fall over or worse, jump off.
So, whether we wind up increasing taxes on the rich, I propose we tax the poor, but because I used to be a PR guy, I am not going to call it that. I’ll call it, “Tax Everybody.” Seems fair, right? No matter who you are or how much money you have, man, woman, child, citizen, resident alien, undocumented or illegal immigrant, if you’re here on April 15th, under my proposal, you have to cough up at least $5. I’d call it a minimum income tax, except we already have one of those and it doesn’t apply to everyone even though you might think it would. I propose that you have to pay this whether you have any income or not.
I don’t have sufficient information to calculate whether that would raise enough money to pay for the things we’ve already bought for ourselves or obligated ourselves to pay for. I suspect it wouldn’t, but we do know taxing the rich won’t take care of that either. However, instead of barely half the people paying taxes, everyone (or more likely almost everyone by the time Congress gets done with it) would pay at least a token amount so everyone would be a little more connected to civic life.
Maybe it would help restore civic virtue and civic responsibility. Maybe it would cause more people to look to themselves to pay for their own bread and their own circuses. Maybe it would only set the doomsday clock of the collapse of America back a few seconds, I don’t know. When my kids do something that isn’t working, I always suggest they try something else. What we as a society are doing isn’t working, so all I’m doing is suggesting we try something else. I don’t think it could hurt and it might help. So whether we wind up raising taxes on the rich or not, I suggest we tax everybody.