Filed under: Capitalism, Economy, Election 2012, Freedom, Taxes, The United States | Tags: Explaining Taxes, It's Not the Government's Money, Taking Has Consequences
Keith Hennessey made an important point about taxes last week. “The government doesn’t give tax cuts, it takes more or less taxes.” The president spoke to a number of college crowds in favor of raising taxes on the rich to subsidize low interest rates on student loans. The President said:
How can we want to maintain tax cuts for the wealthiest Americans who don’t need them and weren’t even asking for them? I don’t need one. I needed help back when I was your age. I don’t need help now. (Applause) I don’t need an extra thousand dollars or a few thousand dollars. You do.
“Let’s assume,” Hennessey says “that you agree with the President — that a college student has a greater need for an extra thousand dollars than a rich person. By itself that judgment does not mean that raising taxes on the rich to further subsidize student loans is good policy. To make a balanced decision you also need to incorporate the harm done by taking money from someone, a factor the President’s quote ignores because it treats tax cuts as given rather than taxes as taken.” (emphasis added)
The language the President uses assumes that it is the government’s money in the first place and the government can decide whether to give it to college graduates to pay for their student loans or to give it to rich people. If we agree with this logic, then because the new graduates have greater need, government should give them the money. In this assumption, the money belongs to the government, so the government should distribute those funds according to need — then the government gives tax cuts to people only when government officials decide that these people need them.
What is ignored here is that the government only gets their government money by taking it from someone. And taking has consequences. It harms the person from whom the government took the money, and it weakens incentives to work and invest. The President’s vocabulary is full on “giving tax cuts” or “give tax cuts”.” Hennessey queried whitehouse.gov for that terminology and turned up 248 hits.
The President’s language puts us on a slippery slope. If we treat all tax revenues as if they originate within the government, then we create a moral parity between giving tax cuts and increasing government spending. That means we trust government officials to reallocate society’s resources to those whom they decide have the most need while ignoring the harm done by the taking. By ignoring the harm done by taking we set no limiting principle on the government’s ability to take that which we earn and own and give it to others. We make the rich pay more because they have greater ability to pay and less need. Sound familiar?
“From each according to his ability, to each according to his needs.”
(Karl Marx (Critique of the Gotha Program 1875)
A mark of successful and efficient government is not how much they spend, but how little they take of their citizens’ money. It isn’t the government’s money.
The government has not been successful nor efficient. The government caused an enormous loss of the wealth of their citizens. Instead of creating a business climate that made it easier for businesses to invest and hire, they did a lot more taking. And they invested their takings in brand new programs that the people didn’t want.
Leave a Comment so far
Leave a comment