According to conventional wisdom, Tea Party Republicans like U.S. Senator Marco Rubio, who’s running for president, are the true “Reagan conservatives” seeking to “take back” the Republican Party on matters of economics.
However, there’s no evidence for this at all, so far. Consider Rubio’s tax proposal.
Under Rubio’s plan [reported by breitbart.com 4-15-15], generally 80 percent of Americans would pay roughly a 15 percent tax rate, and all others would pay at a marginal rate of 35 percent. The higher rate would begin for an individual at $75,000, but doubles for married couples filing jointly.
The plan would decrease marginal tax rates, permit deducting capital expenses, eliminate double taxation on corporate income, make interest nontaxable and move toward a territorial taxing system.
This is what happens when you stand for “tax simplification” over actual justice.
Rubio’s opponents, like Hillary Clinton, stand for their own idea of justice. They define justice, when applied to taxes, as a principle of progressive taxation. What that means is that the more you earn, the higher your rate of taxes. In the extreme case, the person who makes the most money in the country would pay a tax rate of 100 percent. Of course, nobody seriously proposes this, but such an absurd policy would be consistent with the idea, “The more you make, the less you need — and the more you must pay in taxes.”
The issue, at this point, is ethics — not economics. If you believe, ethically, that people have a legally enforceable duty towards others to pay more simply because they have or make more, then you support some version of socialism (including the progressive income tax as we know it). If you define fairness as being entitled to keep what you earn — all of it — and to invest, save, spend or give away whatever portion (or no portion) you wish to invest, save, spend or give away, then you will never endorse what Rubio’s proposing, any more than you would endorse the policies of his opponents.
Republicans, especially Tea Party Republicans like Rubio, have a unique opportunity to redefine what justice, applied to taxes, actually means. In the 1990s, some Republicans, for example, proposed things like the flat tax. The flat tax means that everybody has the same tax rate. If the tax rate were, say, 15 percent, then it would be 15 percent whether you make a minimal income, or billions.
One of the reasons the flat tax never got anywhere is because it was sold as “tax simplification.” It’s true that a flat tax would simplify things. However, the most important reason to support a flat tax is because it’s inherently just and moral, or at least more so than the existing progressive form of taxation. A flat tax does not punish success. It does not harm the individual who is forced into a higher tax bracket because of his or her success; and it does not harm society, by making it harder for the highest earners — the only ones capable of investing further into the economy, creating jobs, and all the rest –to function and keep the economy moving.
None of this says anything about what the role of government should be, or how high the tax rates should be. That’s a whole different debate. If the government limited itself to what the Constitution originally enumerated, and what the focus of a proper government in a free society should be, taxes would not be such an issue.
Going back to the 1980s, Ronald Reagan’s approach was simply to cut — across the board — taxes for everyone. During that time, and since that time, progressives (and some Republicans, too) howled that this is “unjust” or “unfair,” because high income earners should not be getting the same level of tax cuts as everyone else.
Why not? Why is it fair to punish people for having more? Why is it assumed that leaving the richest people with more is inherently worse for society, and the economy as a whole, than placing it in the hands of power-oriented politicians and inefficient, unaccountable bureaucrats?
Even some hard core, Obama-supporting progressive Democrats appear to sense the issue involved here, although they never take it all the way. Here’s what comedian and celebrity Whoopi Goldberg said a few years back about the estate tax, which is once again coming up for debate in Congress: “I’d like somebody to get rid of the death tax. That’s what I want. I don’t want to get taxed just because I died. I just don’t think it’s right. If I give something to my kid, I already paid the tax. Why should I have to pay it again because I died?”
Goldberg implies, in this quote, that it’s her money. If she chooses to leave some or all of it to her kid — well, that’s her business. It’s her moral right and it’s her political, individual right to extend this principle across the board. She would never go that far, of course, and she undoubtedly supports all manner of taxes and forms of socialism that rest on exactly the opposite premise of the one she implied in this statement.
Just once, I’d like to hear a progressive Democrat (or Republican) put on the defensive about this. The question would just be sneered away, I realize, and it’s a crying shame.
The end result? We have a Democratic (progressive, democratic socialist) party who continues to raise taxes on the rich (defined as making $200,000 or more a year, in most cases.) And now we have a Republican Party — the “radical” Tea Party wing, no less — putting you into a higher tax bracket the moment you make more than $75,000 a year (hardly rich, by the way).
If Rubio wants to simplify taxes, he should just come out and propose a flat tax rate for everyone, and justify it on the basis of inherent fairness — i.e. everyone gets to keep the same percentage of what he or she earns.
If Rubio wants tax cuts, he should do like Reagan, and simply propose an across the board cut in the tax rate for everyone.
Rubio’s proposal will generate the kind of reaction I received from a reader who wrote me:
After I enjoy my tax increase to a 35% rate, I can add property, sales, Medicare, Medicaid, and Socialist Insecurity taxes and fork over more than half what I make.
The person who wrote this is not an Obama supporter and would never, ever support a Democrat. These are the kind of people, at a minimum, who Rubio has to attract in order to (1) win and (2) make any victory meaningful, once in office.
Instead, Rubio is doing what Republicans have almost always done: Trying to be a version of Democrat-lite. It will never work, and it shouldn’t.
Republicans, if they’re to grow into being a second party, have to challenge the idea that the progressive income tax is fair, right or practical. They also have to confront the issue of spending — something even Reagan never did — and argue/explain to the American people that most of what the government now does is unwarranted, unjustified, and wastefully executed. If the people don’t agree, they can vote the opposite way, but as things keep getting worse, at least a real alternative will be waiting in the wings.
We need a complete and total alternative to the progressive income tax, and the progressive form of socialism, to debate. Better to lose that debate and win down the road than offering up warmed over versions of the same thing. Democrats, when it comes to progressive taxation and populist socialism, are the real thing. Most voters sense this. That’s why, on our current course, you can totally expect Hillary Clinton to walk to victory.
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