Monday, March 02, 2009


EJ Dionne Jr.:
[Obama's] overall approach to taxes is frankly redistributionist: even as much of the middle class gets a tax cut or no increase, the well-off will pay more. And before the howling on the right gets too loud, consider that we have just gone through a long era involving a far less frank form of redistribution -- upward.

...Do we want to be a moderately more equal country or not? This is the question Obama has put before the nation. Let's debate it without the distracting rhetorical sideshows designed to obscure the stakes in the coming battle.
Well, at least Dionne is willing to call a spade a spade in his first sentence. As for the question at hand, yes, I absolutely believe that this country should be more equal. All people should be treated equally. Unfortunately when it comes to taxes that is not at all the case, as these figures of effective tax rates from Greg Mankiw demonstrate:
Lowest quintile: 4.3 percent
Second quintile: 9.9 percent
Middle quintile: 14.2 percent
Fourth quintile: 17.4 percent
Percentiles 81-90: 20.3 percent
Percentiles 91-95: 22.4 percent
Percentiles 96-99: 25.7 percent
Percentiles 99.0-99.5: 29.7 percent
Percentiles 99.5-99.9: 31.2 percent
Percentiles 99.9-99.99: 32.1 percent
Top 0.01 Percentile: 31.5 percent
Effective tax rates are the total in federal taxes divided by total income. So, for example, while your tax rate may be 28 percent after you account for deductions and credits the real amount you pay may be quite less. It's a much better indicator of the tax burden than nominal rates since they reflect what you actually pay versus what you earned.

Now, where is the equality? And how will further increasing taxes on the rich increase equality? How is that a more just society?

But more fundamentally, why is this a concern of government? The founding fathers did not establish this country to ensure that we all wind up with the same level of income. This country was founded upon the idea (although not always carried out in practice) that all men are created equal. The idea behind government was to create an environment free of tyranny and with maximum liberty in which each person could pursue their own happiness. It most certainly was not so that everyone could be guaranteed the same income level.

Not only do I reject Dionne's question about equality, I reject its very premise.

1 comment:

Anonymous said...

That is why I never read E.J. Dionne.