October 07, 2010
Is raising taxes on "the rich" inherently good?

Jonathan Cohn's column in today's New Republic leads off with an assertion that I hear frequently these days, and one that I think provides a good bit of insight into the soul of modern, mainstream liberalism. Cohn writes that a Republican controlled Congress would "obviously not good news for liberals or for liberalism. The Republicans will try to slash taxes for the wealthy, shrink the federal government, and repeal major legislation starting with health care reform."

Now, I can understand why one might think that "shrink[ing] the federal government" is an obviously bad thing, though I wouldn't agree. One might feel that we need a strong, active, federal government. One might openly favor a move toward a more social-democratic state. And so on. Similarly, if one favored Obamacare, one would see its repeal as inherently bad. But why is there such a widespread view on the left that "slash[ing] taxes for the wealthy" is self-evidently bad? The idea is that high taxes on "the wealthy" (whoever they are) is an inherently good thing. I would think have thought that everybody would have agreed that in the dream world, low taxes on everybody would be a good thing.

Of course, the reality is that the world is full of tradeoffs. But the assertion that higher taxes on "the wealthy" is rarely tied to any tradeoff. Perhaps liberals view it as self-evident, and therefore implicit in the statement, that higher taxes on "the wealthy" bring in more government revenue and that revenue can be spent on valuable things. But that's not really what they say. Do they view it as self evident that higher taxes on "the wealthy" will always bring in more revenue? The evidence doesn't support that as a universal proposition, although certainly it often can lead to greater government revenue. Do they see it as a given that higher taxes on "the wealthy" will lead to a healthier economy? Sometimes that might be true, but there's certainly no evidence of that as a general proposition - if anything, the evidence seems to suggest that in most cases lower taxes on "the wealthy" will lead to greater economic growth. And it strikes me, again, that the default position for normal people of good will would be that it is always better, all other things equal, to leave people in possession of the fruits of their labor. This is not a "no taxes" position. I am merely suggesting that higher taxes, among people of good will, must always be justified.

The only way that one can really see higher taxes on "the wealthy" as an acheivement in and of itself, independent of its actual effects, is by an appeal to envy. "The wealthy" have more, and we want to take it from them. Leaving them with less is ipso facto a good thing.

It strikes me as strange - and as a very bad thing - that this view can be stated so openly and cavalierly, and with so little push back.

Posted by Brad Smith at 10:47 AM in Politics

The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith

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