I guess the "redistributor in chief" accusation coming from the McCain campaign is getting to me. It's been a long time since progressive taxation has been attacked as socialist. I guess the gloves are off. So, perhaps its worth examining the flat tax supporters' "fairness" argument.
The fairness argument, in a nutshell, claims that the flat tax treats all tax payers alike, while the progressive tax unfairly burdens high earners in comparison to low earners. Is this correct?
At the risk of sounding dismissive, the answer is "no."
First, with regards to specific levels of wage income, everyone is already taxed at precisely the same rate as everyone else. A person with a taxable (wage) income of $20,000 is taxed at exactly the same rate as a person with a taxable income of $50,000, $100,000 and $500,000, on all the taxable income that they share in common. The first $20,000 of a six or seven figure taxable income is taxed at the same rate as the entire $20,000 of a $20,000 taxable income.
The same is true for every other taxpayer at every other level of income. For every dollar of taxable income that any taxpayer shares with any other, their tax rates are identical. Thus, a flat tax already exists with regards to comparable incomes. Taxpayers are treated equally by the progressive tax rate schedule on all (wage) income they share in common. That is, they are treated equally to the extent that they are equal.
Thus, in reality, flat tax proponents are not urging us to treat "all taxpayers alike." They can't be, for this is something we already do. Flax tax proponents are actually urging us, on grounds of fairness, to tax higher levels of wage income at the same rate as lower levels.
Tricky tricky. :)
The real issue, then, is whether fairness requires us to tax higher levels of income at the same rate as lower levels of income? Does it?
Again, the short answer is "no."
There are at least two arguments suggesting that progressive tax rates are fair in a more compelling sense than the simple "percentage uniformity" that flat tax proponents rely upon. The first concerns the fact that those with higher incomes are benefiting more from our system of cooperation than those with lower incomes. Progressive tax rates simply shift some of the burden of sustaining the system upward, onto those who are benefiting more from it, and off those who are benefiting less.
This "higher benefit/higher ability to pay" conception of fairness, reflected in progressive tax rates, is far more defensible than the pure percentage uniformity conception embodied in a flat tax. After all, if I benefit more from our system of cooperation, how can it be unfair for me to contribute more to its upkeep, when "more" merely refers to a slightly greater percentage of my higher level of benefit?
The second argument concerns the well understood feature of money's "declining marginal utility" ("DMU"). DMU is a fancy term describing the fact that each additional income dollar contributes less to a person's well-being than the previous income dollar, up to a point where additional dollars offer no utility at all. That is, up to a point where "its just another buck."
DMU implies that extracting dollars from those with relatively low incomes harms them more than extracting dollars from those with relatively high incomes. This is because the goods that individuals purchase with non-discretionary income are more important than the goods that individuals purchase with discretionary income, in terms of their (and their family's) well-being.
Thus, in order to balance the (real) disutility that taxes impose on taxpayers, which the Republicans are constantly bemoaning in their worries over the tremendous tax burden on American families, a progressive tax is a necessary condition of fairness. Without a progressive tax, the real disutility of taxpaying falls most heavily on those with the smallest taxable incomes.
And this argument ignores the fact that capital gains, which are the main source of income for the wealthy, are taxed at far lower rates than most wage income.
So give me a break on this "progressive taxation is socialism" crap.
Joe H.
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I'm not sure logic has much to do with as conflating the beliefs we've inherited, or accepted from our family and peers, as somehow akin to a religious belief (and sometimes, as in the tithe, a faith tenet). It's interesting that the mainstream press still looks at the evangelicals as quaint anthropological subjects.
thecaucus.blogs.nytimes.com/2008/11/02/from-pulpits-of-ohio-a-mixed-message/#more-7099
November 2, 2008, 5:59 pm
From Pulpits of Ohio, a Mixed Message
By Michael Powell
CANAL WINCHESTER, Ohio - Six months ago, Rev. Rod Parsley was one of the more prominent evangelicals to hail Sen. John McCain as a “strong, true, consistent conservative.”
But two days before the election, in a state central to Mr. McCain’s hopes, Rev. Rod Parsley preached to his vast congregation at World Harvest Church of hellfire and “circling in on a fight with the eternal forces of darkness” without ever mentioning Mr. McCain.
In part, Mr. Parsley’s choice could reflect the vagaries of presidential politics. Mr. McCain was forced to disavow the reverend last spring. At that time, church tapes revealed that Mr. Parsley had repeatedly claimed that America was founded, in part, to destroy the “false religion” of Islam.
Not all evangelical churches remained silent in Ohio. And a visit to the web site of the World Harvest Church leaves little doubt about Rev. Parsley’s sympathies for the Republican ticket.
Still, some who have studied the evangelical movement divine signs of splintering, as younger evangelicals begin to assert their own political identity. And Barack Obama has courted them with great ardor.
“You are starting to see some fragmentation; it could be that the days of a monolithic bloc of evangelicals are over,” said Mark Caleb Smith, director of the Center for Political Studies at Cedarville University, a Christian school. “The children of the first generation of evangelical leaders are of voting age and they are questioning old allegiances.
“Whether this is a longer term fracture or something that owes to Barack Obama is not yet clear.”
Mr. Obama also has built on Democratic advances in Ohio. Democratic Gov. Ted Strickland is an evangelical, and a master at mining for votes in culturally conservative precincts of this state. He recently took Mr. Obama for a campaign swing through the southeastern Appalachian hill counties.
“We’ve tried to reach out to the churches recently; we haven’t shied away,” said Joseph Mudra, Democratic Party chairman in Ross County in rural central Ohio. “And the economy is getting evangelicals’ attention too.”
On the Democratic side, pastors in a number of the historically black churches all but openly endorsed Mr. Obama. And white pastors in liberal leaning congregations such as the First Congregational Church, United Church of Christ in Columbus, showered praise on Mr. Obama without handing down an endorsement.
So last Sunday, Rev. Timothy Ahrens noted in his sermon: “What excites me today about the historic race of Barack Obama is that we have reached the place in our country’s leader that a biracial leader can ascend to the office of president. Whether he wins or loses, this candidacy is remarkable.”
Still Mr. Parsley’s silence was perhaps most intriguing yesterday, speaking to the unease some evangelicals still feel with Mr. McCain, even faced with the possibility of a victory by a pro-choice Democratic candidate.
“Evangelicals have had stormy relations with McCain,” noted Mr. Smith. “They don’t feel nearly the same strong connection to him that they did to President Bush.”
Mr. McCain’s choice of Sarah Palin as his running mate assuaged some of the doubts felt by evangelicals.
“She’s real and she connects with them,” said Gene Pierce, a Republican political consultant who has worked with evangelical churches. “She may not be perfect in her life, but you know what, that’s why a lot of the evangelicals go to church on Sunday.”
Still, he added, it is not clear if her personality is sufficient to breath life into Mr. McCain with evangelicals. “She’s a talent for the future in this party,” Mr. Pierce said.
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