Wednesday, March 18, 2009

I know I sound like a broken record...

but you can't, and I don't know how to stress this enough, do something but act outraged when someone else does the same thing.

I know...we all do it. I'm as guilty as the next guy. I've done stupid things and then yelled at people for doing exactly the same thing. There's a difference between people though- if you do something stupid and learn a lesson and feel bad and won't repeat yourself, it's an honest mistake. If you're continually a douche bag, then that just makes you a stupid douche bag.

Back to the point- the next conservative person I meet that uses the phrase "class warfare" to describe Barack's proposed tax plan might just end up getting kicked in the throat. Allow me to explain.

For the past 28 years (barring a few years near the end of the Clinton administration) the tax burden has been increasing, in real and nominal terms, for the middle class and the poor. Meanwhile, it has declined for the upper classes (those making $250k or more). So for roughly 28 years conservative financial pundits, politicians, and high income households have been happily getting their way. Systematically favoring one class over another is class warfare. And favoring the rich in tax legislation over other classes fits that bill. So we've had 28 years of class warfare favoring the upper crust. Now, Obama plans to increase the amount payed by the rich and reduce the burden (hopefully in real terms) payed by the middle and lower classes. And now the conservatives are screaming "class warfare" so hard they might just push their little pooty-puckers out.

Wait a minute. Did I miss something? Twenty-eight years of reduced tax burdens (in real dollar terms) for upper class incomes doesn't count as class warfare but reversing that trend does? How asinine can you be?

There are pretty sound macroeconomic arguments for how tax policies and changes affect national incomes and there are lots of good reasons to question tax policy changes. Class warfare is a bullshit straw-man argument put up to hit people's emotional buttons and keep them from behaving rationally. Whether or not it's desirable or right to reverse the current tax trends rather than changing the system to a more fair one is a lively debate. But no matter what happens, you can't wage class warfare and then cry foul when the pendulum swings back. You can't always be on the winning team.

As for a solution, the way out of this mess is elegantly simple. It's way past time to implement a flat percentage tax. Everyone, excepting people already living in poverty that can't afford food let alone taxes, should be required to hand over some percentage of their income as taxes. Corporations should have to hand over a flat percentage of profits. These should be percentage based and not flat numbers since 10% of a rich person's money is the same punch to the wallet as 10% of a middle class income. It's the same reduction in purchasing power. A flat amount can never be fair. $1,000 is a drop in the bucket for someone making $250k a year but is significantly more damaging for a person making $35,000. Those taxes should go for things that individuals won't provide on their own such as highways, defense, research, environmental protection, and education. Things that benefit everyone. This system has no class warfare and everyone participates and owns an equal share of public works. Of course, this won't happen because the rich like their money and don't want a system that evens out the tax burden. Instead they'll keep calling shenanigans and class warfare and the middle and lower classes will continue to shoulder the financing of public goods.

No matter what happens, the bottom line is that waging class warfare but not calling it that (usually it's referred to as "allowing the markets to work" or "letting people keep more of what they earned") is just stupid. It's no different than being outraged by terrorists torturing captives yet engaging in torture or declaring other people must adopt democracy when there are known flaws in our own implementation. Being hypocritical is a poor example to set, especially if you want to be seen as a leader.

6 comments:

Anonymous said...

I've always wondered how we would do with a national sales tax instead of an income tax. Don't tax food items, but any other consumable item.

You want/can afford a luxury car? Pay the sales tax. Otherwise pay less for a car or use public transportation.

Can afford designer jeans? Pay the sales tax. Or you can go to a Wal-Mart, or a thrift store and pay that sales tax.

Those with 'extra' income could use it for investments, which wouldn't hurt the economy either.

Maybe it's too easy, but this old electrician just can't see the problems with this.

Brandon said...

A national sales tax has a lot of merit. It's a similar idea to a percentage tax. Just have the sales tax be a flat percentage for everything, say 5% on all items. I wouldn't be opposed to a small food sales tax IF it was used to promote good farming practices and help agriculture. It's all similar to the value-added-tax system in Europe, though that system is pretty complicated now.

I like the idea of a sales tax because it is directly based on consumption. If you consume less, you'll pay less. And I think we have to get a reality check and realize that consumption has significant side-effects and cannot continue forever. I also like that a sales tax allows you to keep what you earn and you decide how to spend it, with the taxable portion of the sale going to public goods. Truth is, those that consume more in the retail space typically consume more in the public space, so this would be a well balanced system if implemented well. So instead of rewriting the millions and millions of lines of tax code, maybe it's time to scrap the system and debate a new, simpler, more efficient, more fair, and more evenly distributed system.

Anonymous said...

I would not like the idea of taxing food items - the people living in poverty would be adversely affected by that.

One upside of sales tax vs. income tax is the HUGE reduction in funding for the IRS!

Adam said...

Word! living in Australia and paying the VAT kicked way more ass than worrying about filing taxes. Granted, I left the country without recouping the VAT money I was eligible for, but I see extreme merit in a value added tax.

I've got a few thoughts on a different topic, similar logic. Look forward to that probably Monday...

Anonymous said...

So, Adam...how come your icon is an elephant? I thought that was a Republican symbol. :-)

Adam said...

My girlfriend made those as thank-you cards-- it is a stringently non-partisan elephant. He's actually not even a registered voter and thinks participating in things is for losers.