President Obama and most Democrats are arguing that extending the Bush tax cuts to those who make over $250,000 per year will cost the country $70 billion dollars per year and $700 billion over the next decade. This is an excellent example to highlight how words are used to be misleading and divisive.
First off, a tax cut is not spending and therefore it costs the government nothing. What will cost the government $70 billion per year and $700 billion over the next decade is government programs. The low estimate for the cost of health care reform, for example, is greater than $1 trillion–that’s one thousand billion dollars–over the next decade.
Extending tax cuts will cost nothing, government spending on the other hand will. So what is the Democratic Party position all about? It is about causing division and class warfare prior to an election so Democrats in office can deflect debate from the real issue at hand, which is their reckless spending that makes the reckless spending of the previous administration pale in comparison.
The genuine debate should be the following: Do we try to raise revenue to pay for current unfunded government spending, or do we cut spending? If we choose the former, then raising revenue should entail increasing taxes proportionally on all Americans (this would still mean the rich pay more as a five percent increase on 300K is 5x more money than a five percent increase on 60K).
This would be the only solution to satisfy the ideal of equality under the law. However, for the majority (those making less than $250,000 per year) to raise taxes on the minority (those making greater than $250,000 per year) is to trample on the rules of justice. For someone else to decide that because someone makes above a certain amount of money they should have their taxes raised is completely arbitrary, and arbitrariness is the enemy of individual freedom.
The famous Scottish political economist John Ramsey McCulloch summarized this objection as follows: “The moment you abandon the cardinal principle of exacting from all individuals the same proportion of their income or of their property, you are at sea without rudder or compass, and there is no amount of injustice and folly you may not commit.”
Contemporary conservative-libertarian economist and political philosopher Thomas Sowell leveled an even sharper attack on the policy: “Once you buy the argument that some segment of the citizenry should lose their rights, just because they are envied or resented, you are putting your own rights in jeopardy — quite aside from undermining any moral basis for respecting anybody’s rights. You are opening the floodgates to arbitrary power. And once you open the floodgates, you can’t tell the water where to go.”
The truth is that it is easier to go the above route – of taxing a minority to pay for programs that benefit the majority – than to make the majority decide whether or not they really support such programs in the first place. At this time, it is likely that the majority of Americans would forsake many government programs that have no Constitutional basis in favor of keeping their current tax rate where it is at. Democrats know this and therefore, they want to stay as far away as possible from the genuine debate.
Unfortunately, the Republican position on this issue is weak at best. They argue that increasing taxes on anybody at this time could slow recovery efforts and ultimately, cause less revenue to be collected than actually expected. This is true enough as higher levels of taxation decrease the incentive for individuals and businesses to earn more income and to undertake entrepreneurial risk. Furthermore, this aversion to risk would likely be heightened due to the present level of economic uncertainty. However, Republicans should argue on principles first, by making the point that raising taxes on only those making $250,000 per year violates the ideal of equality under the law, and throw in the “wonkish” stuff second.
Andrew Foy is a third year internal medicine resident who will be starting his cardiology fellowship next summer. He will be featured in Jonah Goldberg’s new book Proud to be Right: Voices of the Next Conservative Generation coming out October 5, 2010 from HarperCollins LLC. His new book You’ve Got to Stand for Something: Understanding & Restoring America’s Founding Principles will be available on September 30, 2010. To learn more about the book visit www.standupnow.net. He can be contacted at Andrew.Foy@gmail.com.