Who’s Paying Their Fair Share?

The dirty little secret of federal tax policy since the passing of the 16th Amendment is that Democrats constantly seek to raise taxes on the wealthier classes to satisfy their constituents and the Republicans let them since Democrats let Republicans expand tax deductions to satisfy Republican constituents. This is exactly why the Founders had specifically forbidden such taxes!

But Liberals (known as Progressives in the early 20th century) convinced the electorate that the income tax was the truly “fair” way of collecting tax revenue.

Governments discovered that as long as the economy grew, so did government tax revenue. And so too, did the ways of spending it. Consequently, it is no accident that the expansion of the federal government coincides with this phenomenon.

But when the economy faltered, the government found itself in trouble. The first president to discover that cutting taxes could stimulate the economy and bring in more revenue was Calvin Coolidge.

The second was John F. Kennedy. Even though Democrats are entitled to their own opinions, they are not entitled to their own facts. And the facts are clear: we need to lower taxes again so that this economy can recover.

I agree. We need to give our economy a boost. We’re suffering from a lack of demand. Roughly 70 percent of our economy is consumer driven, and we, the consuming public, don’t have the discretionary income to support the production of more goods and services.

Because of this money sits on the sidelines, underproductive, uninvested. And because of the size of our current needs, and of the debt that we have accumulated, we can’t cut taxes enough to provide the stimulus that’s required in this unfocused way.

Most of us would disproportionately use any added income to pay down personal debt, so we would not see enough new spending, even considering those with a surplus.

The added activity would not be enough to justify the investments that we need. Growth would continue to be slow and fragile, and the lives of those suffering “under” and unemployment would continue to atrophy. This is not a good path.

We need to direct investment to where it will be most quickly and lastingly productive – to infrastructure for jobs, and to research and education for the human capital that will enhance our competitiveness and growth in the future. Does asking those with a surplus to contribute somewhat more seem unfair? I hope not.