Thursday, December 23, 2010

Lies and More Lies in the Never Ending Quest for Revenue

(Liberty Bell from my personal collection of photos.)

A country's tax policy lies at the center of the debate over liberty. The Founders understood that. They believed that the individual must be protected from government because they understood further that when government has license to confiscate property it will eventually become addicted to doing so.

Alexander Hamilton wrote in Federalist 35 wrote: "if the jurisdiction of the national government, in the article of revenue, should be restricted to particular objects, it would naturally occasion an undue proportion of the public burdens to fall upon those objects. Two evils would spring from this source: the oppression of particular branches of industry; and an unequal distribution of the taxes" (emphasis mine)

He was right.

A recently published study revealed the United States ranks first among nations for the most progressive tax structure. In an editorial in today's Wall Street Journal Alan Reynolds writes: "A 2008 study of 24 leading economies by the the Organization of Economic Cooperation and Development (OECD) concludes that, "Taxation is most progressively distributed in the United States." For all the accusations by the left that the rich must pay their fair share, The Journal of Economic Perspectives reports "the upper 1% of the income distribution earned 19.6% of total income before tax [in 2004], and paid 41% of the individual federal income tax. No other major country is so dependent on so few taxpayers" (Reynolds).

The accusations and distortions by the left are nothing new. Hamilton characterized these kinds of attacks as follows: "...argument presents itself under a very specious and seducing form; and is well calculated to lay hold of the prejudices of those to whom it is addressed. But when we come to dissect it with attention, it will appear to be made up of nothing but fair-sounding words. (emphasis mine)

Despite the fact that the Democrats recently claimed victory over the extension of the Bush tax rates, claiming that raising taxes would harm the economy, they will soon be back to their old bully pulpit attacking "the rich" for their greed and calling for higher tax rates for the "wealthy."

It is they who are greedy. And, sadly, ignorant.

Hamilton understood the importance of sound economic and tax policy and understood further the risk to the citizenry when those in leadership didn't. "There is no part of the administration of government that requires extensive information and a thorough knowledge of the principles of political economy, so much as the business of taxation. The man who understands those principles best will be least likely to resort to oppressive expedients, or to sacrifice any particular class of citizens to the procurement of revenue" (Federalist 35).

It is time for economic literates to explain to the public the facts of sound fiscal policy. Ronald Reagan style. And give voice to the Founders' intentions when they penned the Constitution: That purpose of government is to protect its citizens, not confiscate an ever increasing portion of their income and property in its never ending quest for revenue.

No comments:

Post a Comment