Tax Hikers
I’ve written several times that the left wants big tax hikes on poor and middle-class taxpayers. Simply stated, that’s the only way they can finance a European-sized welfare state.
Some of them even admit they want to pillage ordinary taxpayers.
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The editors at the New York Times endorsed higher taxes on the middle class in 2010.
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The then-House Majority Leader Steny Hoyer also gave a green light that year to higher taxes on the middle class.
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In 2012, MIT professor and former IMF official Simon Johnson argued that the middle class should pay more tax.
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The Washington Post also called for higher taxes on the middle class a few years ago, as did Vice President Joe Biden’s former economist.
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A New York Times columnist also called for broad-based tax hikes on the middle class in 2012.
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A Senior Fellow from Demos also argued for higher taxes on all Americans that year, specifically targeting the middle class.
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In 2013, the New York Times again (!) editorialized in favor of higher tax burdens on the middle class.
Now we have another addition to our list. Writing in today’s Washington Post, two law professors from UCLA openly argue in favor of tightening the belts of average Americans to enable a bigger federal government.
…we need more tax revenue from the middle class, not less.
They start by complaining that middle-income taxpayers have benefited from big tax cuts over the past 35 years.
Middle-class tax burdens are at historic lows. The Congressional Budget Office reported in 2016 that the average federal income tax rate for the middle class – here meaning the middle 60 percent of the income distribution – declined from 7.8 percent in 1979 to 3.4 percent in 2013. Focusing on all federal taxes (not just income taxes), the average tax rate dropped from 19.2 to 13.8 percent over the same period. With these lower tax rates, the share of taxes paid by the middle class has also declined. The middle class paid 35 percent of income taxes in 1979 but only 16 percent in 2013, while its share of all federal taxes fell from 43 to 30 percent.
As far as I’m concerned, this is good news, not something to bemoan. Indeed, my goal is to have similar reductions in tax burdens for all taxpayers.
But the authors raise a very valid point. We will have giant tax increases in the future and people at all income levels will be adversely impacted. Though there is one way of avoiding that grim European future.
Unless Congress is willing to dramatically cut major entitlement programs.
Incidentally, we don’t need to “dramatically cut” those programs. The authors are relying on dishonest Washington budget math.
In reality, the problem is solved and tax increases are averted so long as reforms are adopted to ensure that entitlement programs no longer grow faster than the private sector.
But that’s not what the authors want. They actually look forward to big tax increases.
What the middle class needs is not meager tax cuts but a muscular commitment to robust public institutions designed to benefit middle-income individuals. The higher taxes could come from our current income tax (from tax increases on the middle class and the wealthy) or a broad-based consumption tax (such as a VAT or carbon tax).
I’m greatly amused by the language they use. They want readers to believe that bloated European-style welfare states are “robust public institutions” and that politicians grabbing more money to buy more votes is a way of showing “muscular commitment.”
I’m also not surprised that they embraced a carbon tax or value-added tax.
By the way, the column compares the United States with other industrialized nations. Simply stated, we win (at least from my perspective).
Data from the Organization for Economic Cooperation and Development reveal that American families with children face substantially lower average income-tax rates (in some cases, less than half) than similar families in other developed countries. And this is before factoring in consumption taxes, which represent a large share of middle-class tax burdens in most countries, but not in the United States.
Those are remarkable numbers. Income taxes grab a much bigger share of family income in Europe. And then governments take an even bigger slice thanks to onerous value-added taxes.The authors would argue that Europeans get “robust public institutions” in exchange for all that money, but what they really get is less growth and lower living standards.
Indeed, it’s worth noting that the richest European nations are on the same level (or below) the poorest American states.
That’s not exactly a ringing endorsement for higher tax burdens.
The bottom line is that left-wing politicians usually pontificate about raising taxes on the rich, but the truly honest folks on the left openly admit that the real targets are lower-income and middle-class households.
Reprinted from International Liberty
Daniel J. Mitchell
Daniel J. Mitchell is a Washington-based economist who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.
This article was originally published on FEE.org. Read the original article.
