Pages: 1 2
Since ancient Athens, politics in democracies has been brutal. That’s because the conflicts that a democracy empowers a great variety of ordinary people to debate are not about technical matters requiring specialized knowledge. Rather, they arise from questions about the fundamental principles, beliefs, and values that give people their identities and provide meaning for their lives. Such questions are not “scientific,” and the conflicts they raise will not be resolved by experts and technicians. And since these principles and beliefs are so fundamental to our self-identity and meaning, they raise intense passions, and so the public conversation about them is often emotional, at times even angry. Throw in personal ambition, the lust for power, and the vanity of politicians and office-seekers, and the fights can get bloody indeed. But that’s the price we pay for free political speech. As the Athenian playwright Sophocles once said, “Free men have free tongues.”
Consider the biggest domestic problem facing the nation: metastasizing debt that promises to explode because of exponentially increasing entitlement spending. If the problem were simply a technical one, accountants could solve it. Look at the math: our debt has surpassed $15 trillion, over 100% of GDP, and absent entitlement reform will reach 344% of GDP by 2050. Spending on Medicare, Medicaid, Social Security, and Obamacare will devour 18% of GDP by 2050, consuming all federal tax revenues. Total federal spending is slated to consume one-half of GDP by 2056. These numbers point to a Greece-like collapse unless entitlement spending is reined in.
Likewise, simple math discredits the solution Obama presented in his State of the Union speech with generous helpings of class-warfare rhetoric. Obama wants to impose a 30% minimum tax on the “rich,” defined as those making over $1 million. The “rich,” however, simply do not have enough money to solve the ballooning debt and entitlement-spending problem––confiscating outright all the wealth of Forbes magazine’s richest 400 Americans would barely cover Obama’s 2011 deficit, let alone the cost of future entitlement spending. As for making the rich “pay their fair share,” reducing the deficit by raising taxes on the two top brackets would require preposterous tax rates of over 200% in 2050. Worse yet, raising the capital gains tax, which Obama’s minimum tax on millionaires perforce would do, constitutes what Larry Kudlow calls a “tax on seed corn,” one that would reduce the amount of capital needed for investment and economic growth. Finally, the sorry record of tax increases disconnected from spending reductions should make us all chary of giving more money to a spendthrift federal government that has increased spending per capita 166% since 1965. Simple math points us to the only solution: cut entitlement spending and reduce deficits to more manageable levels.
But of course, the problem isn’t about math and how to balance the books. The conflict is one of differing visions of the federal government’s role in achieving certain contested ends. Obama claims a solution to our economic crisis demands that the rich pay their “fair share,” and we create an economy in which “everyone gets a fair shot.” But what is “fair”? The Organization of Economic Cooperation and Development reports that the U.S. already has the most progressive tax system among industrialized economies. The top 10% of taxpayers in America pay 45% of all income taxes (personal income taxes and payroll taxes) but earn 33% of market income. In socialist heartthrob Sweden, by contrast, the top 10% pay a percentage of taxes equal to their income, 26.6%. Paying a greater share of taxes than one’s share of income might strike some people as more than “fair,” as would the simple fact that nearly half of Americans pay no personal income tax, while the top 10% pays 70%. But Obama has a different set of values and a different vision of what ends the government should pursue.
Pages: 1 2