What is the purpose of an income tax?
Is it to raise revenue so that our government can function and run duties that we, the people, believe are integral to our nation - and consistent with our Constitution? Is it so that our nation can grow and prosper? Or, is the purpose to create "fairness" among our people?
This op/ed from the Wall Street Journal weighs in on the topic.
The goal, Mr. Furman explained, is to establish a "a basic issue of tax fairness." Millionaires should pay an effective tax rate no lower than a middle-class secretary or a plumber. But wait: IRS data show that middle-class workers on average pay just under 15% of their income in federal taxes, while the richest 0.1% pay almost twice as high a rate on average, or 26%.
The U.S. already has a Buffett rule. The Alternative Minimum Tax that first became law in 1969 was also supposed to make sure that millionaires pay their "fair share." The top AMT rate is now 28%. But the AMT has become a public nuisance, adding new complexity to the tax code and ensnaring more and more middle-class families because it isn't indexed for inflation. The surest prediction in politics is that any tax that starts by hitting the rich ends up hitting the middle class because that is where the real money is.
An even greater absurdity is the White House claim that this is a first step to tax reform because it will ensure that the "rich don't take advantage of tax breaks or structure their affairs to pay less taxes." Huh?
A basic principle of any tax reform worth the name is to broaden the tax base in order to lower rates for everyone, not to raise them. The point is to make the tax code more efficient by reducing the incentive for avoidance—legal or illegal.
Often, it seems to me that the goal of many liberals is to make life "more fair." If "more fair" means protecting Constitutional rights of individuals, of figuring out ways to offer more opportunities to everyone to do well, and the like - then I'm all in favor of it. If, however, "more fair" means simply taking away from those who are doing well to give to those who are not - irrespective of underlying reason - then I am not.
Some of us do better than others for a myriad of reasons. Some of us are smarter or prettier or have more energy. Some of us have far more pleasant personalities; are more creative and hard working. Others sacrifice and save and invest while others do not.
Should we demand plastic surgery to make those who are exceptionally attractive more average? Should drugs be given to the super-smart among us, so that their brains are more similar to "normal" people and thus "more fair"? Of course not.
Not only is helping those who need help good - it is something that all of us ought to strive to do. Nevertheless, this does not mean cutting down those who do well themselves. Taxation is a method to run our government. It should be a system that encourages all to strive to do their best; not something to penalize. That is fair!
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