Thank you, Warren Buffet, George Soros and William Gates Sr.
By leading a group of superwealthy Americans speaking out against repeal of the estate tax, you have given me cover to float an idea that surely escaped the architects of the Bush tax cut and its Capitol Hill supporters: What’s really needed is a new interest group made up of the willing taxpayers of America.
Americans don’t like paying any more taxes than they have to, and they certainly resent it when some don’t pay their fair share. But there’s a deeper reality that gets lost in the scramble to distribute the budget surplus.
Not only are most Americans of ordinary means unexcited about a tax cut,
but they willingly pay their taxes—and derive some satisfaction from doing
so. Cutting taxes may bind together Republican activists of varying ideological
hues, but paying taxes is how we as a people foster the public goods that
contribute to our individual and collective well-being.
It’s ours, not . . .
This is important, because the longer the debate over the Bush tax cut, the
more its case shrinks to the visceral argument that “It’s not the government’s
money; it’s the people’s.” Consider how threadbare the rest of the case is:
- We need to cut taxes to move the economy. The Bush tax cuts are too
skewed to high-income households and would take effect far too late to have
a constructive effect on the slowing economy. An immediate, temporary tax
rebate for low- and middle-income households, however, might conceivably
help, if help is needed beyond lowering interest rates.
- We need lower marginal tax rates to increase incentives to work and
invest. The economy enjoyed extraordinary productivity gains and growth on
the heels of two increases in marginal rates for high-income citizens.
- Federal taxes are at an all-time high; we’re overtaxed. Not really.
While federal tax revenues (including payroll taxes) as a share of GDP are
above 20%, the tax burden on the vast majority of households has remained
constant or declined during the past decade. Increased revenues come from
the sliver of the population that has reaped the lion’s share of the economic
gains, and their after-tax income also has soared.
- If budget surpluses aren’t refunded via tax cuts, they will be
squandered through spending increases. What constitutes squander?
More funds for education, health-insurance coverage, prescription drugs,
scientific research, environmental quality, national parks? Discretionary
domestic spending as a share of the total economy is the same level today as
it was in the early 1960s. Even with more spending, much of the surplus still
could be saved to help future generations.
- Projected surpluses are so big that a large tax cut is fiscally
responsible. The underlying numbers suggest otherwise. Most of the
accumulating surplus is in federal trust funds. Reasonable budget projections
leave much less room for tax cuts and new spending during the next decade
than Bush officials assume. And the long-term—75-year—federal budget
projection remains very much in deficit.
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So what is left of the case for the Bush tax cut? Not much more than “it’s the
people’s money.” Which brings us back to the Willing Taxpayers of America.
We are a sensible, decent people, fully capable of making reasoned
judgments about how to provide for our families, communities and country,
this generation and those that will follow. We know that the government is not
some foreign agent inimical to our interests, but an important instrument for
achieving these aspirations. Taxes are a necessary part of that effort—and
most Americans accept that reality.
Who knows: WTA might soon rival the NRA and AARP.