“On Monday, I’ll lay out my plan for how we’ll do that — how we’ll pay for this plan and pay down our debt by following some basic principles: making sure we live within our means and asking everyone to pay their fair share.” – President Obama
As much as the President and the White House want to deny it, talk of “fair share” ahead of tax increases is class warfare. Now, usually class warfare makes for pretty good politics – but first let’s talk about fair share.
In a democracy, policy is set by the will of the majority, not matter how far removed from any recognizable standard of morality. When we consider whether a person is or isn’t paying a fair share of the tax burden, what we are really saying is “do I think this or that person should pay more taxes relative to some other person (usually me).” The problems with this are manifold.
For one thing, we tend to make these judgments in terms of pain equality. That is, we all realize that paying higher taxes is painful. In our limited faculties though, we always cast that measure of pain into our own frame of reference. “How much pain does a person making $500,000 a year feel if they have to pay an extra $25,000 in taxes? Well, they could pay the extra $25,000 and still be WAY ahead of me on take-home pay, so I say they feel less pain that I would if I had to pay higher taxes. So, they can afford it.” This has nothing to do with fairness, of course. It is just a means of deciding who can afford a steeper bill.
Therein lies the problem. It makes me a judge over that person in terms of what level of pain they can bear relative to their countrymen. For the totalitarian this is fine, but for the Christian it presents difficulties. If I am truly equal with my fellows, then I really have no place to make such judgments – I’d best stick to my own difficulties.
Many don’t see it that way. They see themselves as somehow “partners with God” in determining what is appropriate giving behavior for the citizenry. “Well, you see, I’m a Christian and in touch with God. And He said that you ought to pay more with the blessings He has given you [yes, we will spiritualize it]. So, I’ll just use the government to enforce His will … which He has shown to me but not you … ’cause I’m special.”
So what is fair? Well, the best I can come up with is a flat tax – everybody pays the same rate. It has Biblical precedence both in the practice of tithing (a flat 10% of income) an in secular government (see Genesis 41 – Joseph’s management of Egyptian taxation). The flat tax is clean – a percentage of your production is paid into the collective to fund defense of individual rights (including property that derives from your production … presumably your property value will be consistent with production and you will be paying proportionally for its protection).
The flat tax also removes some ugly oddities of the tax code. There is no more marriage penalty or benefit. (Think about it, if my wife were to die I’d be left with three kids and a higher tax rate … somehow a single parent owes a larger percentage of their income to the collective – you know, their fair share.) It could easily remove the income-versus-capital-gains issue as well: we could simply set the capital gains rate to the same as the income tax rate. (Side note, I see the argument eliminating capital gains taxes, as that money has already been taxed once. I’d argue that capital gains taxation is fine, as long as we allow unlimited write-offs for capital losses as well.)
So why is this good politics? For the same reason it’s immoral policy. Arguing for a fair share is an argument that plays to each persons sense of superiority (pride) and it’s derivative (envy). These are things you can absolutely count on to resonate with the populace.
So, for President Obama I think this is the right political move. Yes, it’s a little like throwing the gun, but it may be the only move he has left. His fortunes will likely rise or fall with the economy and various other motivations he gives to the opposition. So, he has to try something to motivate what base he has left. Appealing to envy, pride, mistrust, and arrogance is not a bad place to start.