Where the money is


J.E. Dyer at Hot Air:

No, taxes shouldn’t be a “fairness” issue

What are we, six years old? Taxes should pay for the costs of government. That’s what we have taxes for.

The proper purpose of taxes is not to establish a condition of “fairness.” It’s to pay for government: a legislature, executive, military, police, firefighting, courts, schools. But for 100 years now, the percentage-based income tax has been shifting public dialogue on taxes steadily away from their proper purpose, and toward increasingly juvenile arguments over “fairness,” as if the tax code is like Mom, telling Makayla to share the toys and be patient because Brendan is little.

If we let taxation be about “fairness,” rather than paying for the cost of government, the two big problems we have are defining “fairness,” and defining the role of government in promoting it. Those questions will never be settled to the satisfaction of all.

It might seem that the first question – “what is fair?” – is the more contentious one. We discuss it incessantly, after all. But the more fundamental question is actually what government should be doing about fairness. The freighted nature of our discussions about fairness is largely relieved if we assign a limited, utilitarian role to government. It doesn’t much matter what other people think is “fair,” in a lengthy list of situations, if they can’t harness the power of the armed state to enforce it on their fellow men.

Thus, I reject the whole idea that government needs to keep an eye on the citizens’ incomes, and worry about “fairness” as if the numbers are a meaningful indicator of it. For much of American history, no government at any level actually knew how much income individual citizens had. That was not a problem. It didn’t need correction. We could do away with virtually our entire tax code, if we did away with the modern idea that government needs to know what our incomes are.


The article starts out okay but you can see where this is going – an argument against the progressive income tax and in favor of a flat tax and/or national sales tax, two chimeras of modern right-wing politics.

Nobody likes paying taxes. It’s easy to convince people they are taxed too much, and fairness will always be an issue because nobody wants to pay more than their fair share (or see someone else pay less.) There will always be plenty of people on both sides of the political spectrum who object to paying taxes for things they don’t thing government ought to be doing.

Dyer conflates the issue of how taxes should be spent with how they should be raised.

There is an urban legend about the infamous bank robber Willie Sutton. When asked why he robbed banks Sutton allegedly answered “Because that’s where the money is.”

If we look only at the question of who should pay taxes, the answer is simple – the people who can afford to pay them.

We could pass a law that says every man, woman and child in the nation has to pay a flat $5,000 per year in taxes, but how many would be able to pay? People living below the poverty line cannot afford to pay taxes. Neither can most children or the disabled. The elderly may have income but most of them are living off retirement savings, investments and pensions.

There are lots of working poor that can afford to pay a little bit in taxes, but less than their “equal” share. Then there are the people in the middle class who can carry their own weight. Last but not least there are the rich and the super-rich.

That’s where the money is.


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22 Responses to Where the money is

  1. votermom says:

    In general I am in favor of everyone paying taxes so that government can do the things it should do – national defense, roads, believe it or not postal services, and a safety net.
    But in this century the government has been throwing tax money away so much that I can’t agree to any tax hike until they get the ridiculous profligacy and gambling under control.

  2. Anthony says:

    A flat tax would be fine with me. Currently, 48% of the population pays no taxes at all; the bulk of the burden (in numbers) is on the middle class, while the wealthy, although paying a reduced rate, account for more than half of the total tax dollars collected by the IRS.

    I’m not a wealthy man by any means, but if everyone paid 15% (excepting those below poverty level), this BS about “who paid what in taxes” would cease to be a campaign issue

  3. murphy says:

    “48% of the population pays no taxes at all.”

    yeah well that’s because 48% of American households are pretty frickin poor.

    87% of non-paying families earn less than $40,000 a year. 61% of them earn less than $20,000 a year.

    This link has good info.

    http://news.yahoo.com/numbers-47-percent-pay-no-income-tax-look-170500327.html

    • 1539days says:

      87% of Americans also pay a lower effective tax rate than Mitt Romney.

    • Anthony says:

      Your link doesn’t say that.

      It says 87% of people who earn $40,000 per year pay no taxes; 61% of people who earn $20,000 per year pay no taxes

      • Anthony says:

        Just re-read your post, and I think I mis-read it the first time.

        The reason they pay no taxes is because their income is taxed so ridiculously throughout the year that the current system offers them refunds or no taxes.

        I’m still in favor of a flat tax, where everyone pays the same percentage, and 15% is not such a stretch. I think that if “we should all share the burden equally”, then let’s go! That would give our ‘gubmint’ an enormous surplus of tax dollars per year that taxes would cease to be a talking point for politicians.

        Of course, both sides want to continue dividing the public along these lines that it probably won’t ever happen

        • myiq2xu says:

          If you make $20,000 a year 15% will pinch a lot more than 15% of $1 million would.

        • Anthony says:

          Of course, one can also say that 15% of $1M is a hell of a lot more money than 15% of $20,000 If everyone had to pay the same rate, then we might have a lot more of an inclination to say how tax dollars are spent (or squandered).

          “If it doesn’t cost me anything, then I don’t really care what they do” seems to go with that territory.

          Both parties have been looting the SS lock box for years; and if we were paying for the current war(s) with tax revenue, the wars in the Middle East would’ve come to an end a long time ago

        • Three Wickets says:

          If everyone paid 15%, total federal revenue would fall substantially which basically means cuts to entitlements and defense, and/or more borrowing.

        • Three Wickets says:

          Flat tax would lose revenue from middle and upper income households a lot more than gain revenue from lower income households.

  4. benny says:

    Taxes, if used for the correct purposes, is good. The dems, keep on creating new social programs, where our tax dollars go down a hole. Let the govt. not create any new programs, scale down those that exist, and taxes ain’t a problem. The OWS protests against the 1%. But the fact is that most of the taxes collected are from those folks.

  5. 1539days says:

    I think we can safely say that whatever we’re doing isn’t working. Liberals love to go after conservatives for protecting the rich by being against raising income taxes. The reality is that the Democrats had two years to raise taxes (or pass a budget) and didn’t because many of their members would lose their elections if they did.

    Conservatives love to use the threat of tax increases by liberals. In reality, taxes have not gone up. If the republicans really had some balls, they’d call the president’s bluff. Tell him they won’t filibuster in the Senate and the Republicans in the House will abstain from voting. The Democrats can pass a tax increase that’s 100% their own. I guarantee the Democratic caucus would refuse.

  6. jjmtacoma says:

    Maybe they should think about taxing the rich or letting them keep the benefits of the tax cut for increasing the tax base through employment where the benefits are tied to the quality of the created job?

    I would find it hard to believe it could be any harder to figure out than our current tax code.

  7. Lola-at-Large says:

    FYI: I’ve scheduled a post for a little over an hour from now. Feel free to reschedule as necessary.

  8. yttik says:

    “Nobody likes paying taxes”

    Actually I used to. I used to believe my Gov, local state, and fed, were spending the money on important things. I’m not alone because for the first time ever my community voted against the levies for the library, the fire dept, and the schools. People love these things and we’ve unconditionally supported them for decades. The problem all of a sudden is their mismanagement of money, lying to taxpayers, and failure to provide the services they claimed the last levies were for.

    Every year it seems like the Gov raises taxes and cuts services. We need more money so we can provide xyz….and they get the money and then they cut the service anyway. Sorry, we just can’t afford it anymore. But give us more money and we’ll try to reinstate it….

  9. WMCB says:

    that’s where the money is

    Actually, it’s not. People think that the money is in the pockets of the uber-rich, but most of it isn’t – it’s in the pockets of the upper middle class. Yes, millionaires and billionaires have lots more money, but there are comparatively few of them. You could tax their entire income and not solve a tenth of our budget problems.

    I’m not saying they couldn’t pay more – of course they could. But MOST of the money in this country is in the pockets of the middle class, not the rich. It’s simple math. 5000 guys with $100 is much more in aggregate than 5 guys with $1000. And the middle class knows that, and knows that the Left’s cries of “Tax the Rich” is a scam and a feint for the hand reaching for THEIR pocket.

    And until we can drop the lies, and the jostling for rhetorical advantage, and the emotional arm-twisitng, we will NEVER solve our fiscal problems, because we can’t have an honest conversation about expenses, and taxes, and where the money has to come from, and what the trade-offs are.

    But I’m not holding my breath. The stupid right yells “Stop all these taxes, but keep Medicare, and SS, and a large military, and…,”, knowing damn well that the numbers don’t add up. The stupid left yells, “Tax the rich, or that other guy over there, or people I just don’t like, and let’s all have freeeee everything from the bountiful guvt!!” – also knowing damn well the numbers don’t add up.

    Fucking liars, both sides. And we are not going to solve this if we can’t even be truthful about the unpleasant realities.

    • yttik says:

      What I want to know is, how much money does the government need in order to provide for the people, because apparently 14 trillion dollars isn’t enough. How much is it per person now? 100 grand?

      That’s one problem with government, rather than figuring out how much it cost to provide a service, they say, how much do you think we can get? Can we borrow against it? Can we spend it on something else? Can we go a 1000 days without creating a budget at all? Can we just convince people that the rich are hogging all the money? Why yes, yes we can!

  10. HELENK says:

    http://thehill.com/blogs/on-the-money/budget/207439-federal-workers-get-16-percent-more-than-private-sector-cbo-finds

    when you are making less and paying more for groceries, gas and assorted things and find out that the people you are paying make more than you,, it can be a tad upsetting

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