Per popular wisdom, taxes are the price we pay for living in society. Defenders of government will tell you that it exists to collect and direct resources at a level well beyond the capacity of the average individual and that this ability allows public programs from which we all benefit to be created.
But the reality is certainly less rosy. In today’s political landscape, taxes are the price those towards whom politicians have personal animus pay for outrageous and irresponsible spending.
The wealthy have long been the source of populist ire, sometimes on the right, but most frequently on the left. They are painted as greedy, self-interested takers, whose wealth does not contribute to society.
In the rollout of her proposed “ultra-millionaire tax,” Sen. Elizabeth Warren (D-MA) pointed to economic data that suggests the wealthy are 40% richer since the start of the pandemic, insinuating this is a result of a tax code that favors the wealthy. It of course couldn’t be that her party favors excessive taxes and regulations that have a regressive effect that increase the cost of business and make it harder for those less well-off to save money and weather hard financial times.
It’s telling that Warren’s proposed tax, which would append a 2% tax to an individual’s net worth (this includes property, not just income) above $50 million, is being sold as a way to “re-balance society” against underprivileged groups whom, according to class warfare rhetoricians like Warren, get an unfair shake because the rich have rigged the playing field against them.
Her proposal is not about economics and taxes as the chief revenue measure government relies on to pay for itself; it’s social policy. It’s about pursuing ideological goals and using the power of government to bring society more into line with one that reflects her ideas. Warren is certainly not alone in using this rhetoric. She may even be right in some cases, though that hardly justifies smearing all wealthy people, many of whom run the businesses average citizens rely on to collect their paycheck and support their families, with the same brush.
Her proposal is unlikely to ever become law. It doesn’t have Biden’s approval and it would be incredibly hard to enforce. But the hostility she and others in her party demonstrate to wealthy Americans is troubling, as is her willingness to co-opt the power of the government and use laws as a tool to promote her own personal preferences.
Equality is a powerful message. And Warren appeals to a more equal–and a more just society–in advocating for her tax proposal. But the equal outcomes she promises come as a result of an application of law that doesn’t treat Americans as equals, but rather tries to lift up a chosen segment of society at the expense of one it views with more hostility.
The American system promises all its citizens equal rights. That’s impossible when public policy is used to proactively shape law and to champion the cause of the few. Regardless of whether one agrees with Warren on this particular proposal or not, the antipathy it would codify towards a particular class of people cannot be tolerated. It sets a precedent that may be used by future politicians to punish classes of people Warren wants to champion.
Warren is hardly alone in her desire to use Congress’ law-making power to bend society towards her desired outcome. President Biden’s recently proposed tax hike is steeped in rhetoric that’s largely the same.
While exact details of the changes Biden want to make haven’t been outlined yet, his proposed changes reportedly include, “raising the corporate tax from 21 percent to 28 percent; increasing the income tax rate on people making more than $400,000; expanding the estate tax; paring back tax preferences on pass-through businesses such as limited liability companies; and setting up a higher capital gains tax rate for individuals making at least $1 million.”
This would be the largest tax increase in 30 years and it’s being sold as necessary to pay for the $1.9 trillion stimulus bill Biden and his party recently championed.
It’s worth noting that those who Biden wants to pay for the bill–namely the wealthy–largely didn’t reap many of its benefits. Is it really fair the burden of paying for Congress’ fiscal profligacy should fall on their shoulders, particularly when their wealth could be better employed by being invested in the post-pandemic economy and helping stimulate economic growth?
A good portion of the stimulus bill had nothing to do with bailing out states or individuals hardest hit by the pandemic. It included grants for things like racial justice in agriculture. And while addressing racial disparities in farming might be a laudable goal, it certainly shouldn’t be bankrolled by American citizens.
There are echoes of Warren’s rhetoric in the fact that Biden’s administration is looking to tax an unpopular portion of society–namely the rich and corporations–to pay for the stimulus and all the pet projects of politicians it funneled money to. There’s a fundamental inequality here that has nothing to do with the size of anyone’s bank account.
And that is the worrying willingness of politicians to look at constituencies not as individuals who all hold equal rights that government needs to view and protect equally, but as members of demographic groups, some of whom are to be helped by government and some of whom are to be vilified by the government.