The following is presented as part of The Columbian’s Opinion content, which offers a point of view in order to provoke thought and debate of civic issues. Opinions represent the viewpoint of the author. Unsigned editorials represent the consensus opinion of The Columbian’s editorial board, which operates independently of the news department.
Go after the hated rich, hit them hard with taxes on their wealth, listen to the applause, figure on Democrats now winning the midterm elections and pretend it’s all about debt reduction and compassion for the average American. That’s President Joe Biden for you, skipping the parts about governmental exploitation and possible economic wreckage.
With maybe a wink if you looked carefully enough, Biden said at a press conference that billionaires in this country were paying taxes on just 8.2 percent of their income. That’s not true. Biden is counting stock gains not yet converted to money as income. They are not income. His human targets are not just billionaires, but everyone worth $100 million or more, and he plans to take at least 20 percent of “income” with the possibility of more hanky-panky.
Taxes on such assets as stocks are known not as income taxes, but as wealth taxes. That’s what Elizabeth Warren cheered for during the Democratic presidential primary even though they have not worked in Europe where most have abandoned them. One issue is that they would cause both foreigners and Americans to invest less money in these U.S. The consequence could be less capital needed to expand, create jobs, pay employees more and charge consumers less.
And we have the most progressive tax system in the developed world except for tin Luxembourg. That means the rich in the U.S. pay higher taxes as a percentage of income per capita and the middle class pay a lot less than in Europe.
It is true as Biden has pronounced that our middle class is shrinking, but that has been because people are making more money and moving up in economic status, not because they are making less and moving down. Something else to keep in mind is that 57 percent of our workers paid no federal income tax last year, while the top 10 percent, bringing in less than 50 percent of all income, paid 70 percent of all the taxes.
Our poorer citizens also get a lot more benefits of varied sorts from government than the high and mighty, meaning monetary inequality is nowhere near what it is often said to be.
Of course, average folks still pay a lot in payroll and state taxes, the COVID virus has left a mess and our deficit could someday ruin us, but there is good news out there. It is that jobs increased by 431,000 last month as wages grew and unemployment went down to 3.6 percent. Biden contends his plan would reduce the deficit by $1 trillion over the next decade, but a far more effective plan would be to cut spending, especially given the return of earmarks, also known as pork. This is the practice whereby a member of Congress sells his vote on some issue to get more money for a local project benefitting him or her politically.
Not a few government programs take more than they give, and reform can reduce deficits, help fight inflation, spur the economy and offer better lives and more secure futures. I would suggest Biden and his colleagues sweat their way through identifying what spending can and should go away instead of making our amazing country less amazing. If they don’t, the Supreme Court may save us. The words of the Constitution only allow federal taxation on real income.
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