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Republicans are Pro-Choice (on Paying Taxes)

Republicans are Pro-Choice (on Paying Taxes)

Written by Tim Price

Last October, President Obama introduced the so-called “Buffett Rule,” a tax provision that would require multimillionaires to pay a minimum 30 percent effective tax rate. It was named for the Oracle of Omaha himself, Warren Buffett, who famously complained about paying a lower tax rate than his own secretary. The idea garnered a great deal of public support, with one CNN poll from April 2012 finding as many as 76 percent of Americans in favor. Last week, bowing to popular demand, House Republicans passed the Buffett Rule Act of 2012, which naturally has nothing to do with any of that. Instead of establishing a baseline of fairness, it encapsulates the conservative notion that wealthy Americans shouldn’t be asked to contribute any more to society than they’re willing to volunteer.

The Republicans’ version of the Buffett Rule, which is not actually a “rule” in the sense that you or I or Webster’s Dictionary might understand the word, would allow taxpayers to check a box on their tax forms if they want to contribute more than they owe in order to help pay down the deficit. But, you may ask, can’t taxpayers already choose to pay more than they owe? Why yes, they’re free to send a check to the Treasury Department. So what does this bill actually do? Well, it would add a box they can check to send it to the IRS instead! The Joint Committee on Taxation projects that this bold innovation would help raise $122 million in additional revenue over the next 10 years. That’s slightly less than the $47 billion that Barack Obama’s version of the Buffett Rule would raise, but combined with more tax cuts for the rich and corporations, it puts the hard-nosed deficit hawks in the GOP on track to balance the budget some time around the heat death of the universe.

There’s a fundamental ideological divide between progressives and the modern conservative movement, and it concerns how much they buy into the concept of the social contract. That divide is reflected in the GOP’s fallback response to President Obama’s Buffett Rule proposal: “If Warren Buffett thinks he doesn’t pay enough taxes, why doesn’t he just volunteer to pay more?” Mike Konczal effectively dismantles this pseudo-logic here, and on a rhetorical level, it’s on par with “If you love the government so much, why don’t you marry it?” On the other hand, it makes a certain amount of sense if you think of society as something we can choose to opt out of once it’s outlived its use to us instead of an ongoing support system that we’ve all bought into. If you see the rich as the people who have benefited the most from our tax-funded social structure, it only seems fair to ask them to give back more in tough times. But if you think the rich are noble martyrs who are doing the rest of us a favor by choosing not to “go Galt” and withdraw from society, it’s clearly unjust to ask any more of them unless they volunteer it out of the goodness of their hearts.

Unfortunately, the GOP approach presents an obvious collective action problem, which is why it’s expected to raise so much less money than Obama’s mandatory minimum rate. The reason we have a tax code in the first place is that we determined it was impossible to fund the essential functions of government by having the president busk for tips. We don’t set the federal budget by passing a basket around and adding up the loose change we’ve collected. Congress establishes tax rates, we pay our taxes, and in exchange we get schools, roads, police, firefighters, health care, clean air, safe food, and so on. That’s how it works – except for the wealthiest Americans. With Republicans’ help, they have a few extra steps, like hiding their money in tax shelters, benefiting from all those government services anyway, and then complaining vociferously about how unfairly they’re treated.

Case in point: during last week’s Friday news dump, Mitt Romney released his 2011 tax returns, which showed that he had overpaid his taxes to avoid dropping below a 13 percent effective rate. At first blush this might seem like an example of the Republican Buffett Rule in action: look at this guy, giving until it hurts! Never mind the fact that he once said anyone who did that was some kind of moron who didn’t deserve to be president. But this was pure campaign strategy, not altruism. Having made $13.7 million last year, he paid only a 14.1 percent effective tax rate even after fixing the numbers. The problem is, he’d previously said he’d never paid less than a 13 percent rate in the last 10 years, and if he had taken all the deductions he was entitled to this year, he might have wound up paying as little as 9 percent. To put it another way, if Romney had taken full advantage of the breaks offered to him by the current tax code, he would have paid so little as to embarrass himself. And he’s not alone. According to the Congressional Research Service, one quarter of millionaires pay an effective tax rate of less than 26.5 percent, while 10 million middle-class Americans pay a higher rate.

As former Reagan administration official Bruce Bartlett has noted, the ineffectual nature of the GOP’s Buffett Rule is a feature, not a bug. He writes, “The political reality is that Republicans don’t really support taxation at any level. Of course, none will go on the record saying that they favor abolition of all taxation; they just support every single tax cut and oppose every single tax increase.”

In the extreme Ayn Rand-inspired worldview that Republicans like vice presidential nominee Paul Ryan have embraced, non-voluntary taxation is essentially theft. In reality, it’s the only way to provide vital public goods. As I wrote in the wake of the Aurora shootings, an equitable society depends on a strong and reliable social safety net, not the kindness of strangers. The same holds true for other government functions. If we want the services we’ve determined government can most effectively provide, and if Republicans are serious about wanting to rein in the budget deficit, we need to set rules that establish a steady stream of revenue, not hope that Bill Gates is in an especially good mood when he fills out his 1040.

This post was originally published by the Roosevelt Institute.

 

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51 comments

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1:27AM PST on Jan 25, 2013

Thank you for sharing

10:42AM PDT on Oct 10, 2012

Love the picture.

8:37PM PDT on Oct 9, 2012

Thanks for providing Tim Price's excellent summation of the GOP's idea of " wealth distribution". I honestly think they want to do away with the Constitution and go back to 1777 and the Articles of Confederation and Perpetual Union.

8:06PM PDT on Oct 9, 2012

@Carla V. The Bible calls greed one the seven deadly sins. Incidentally, Jesus is not going to make a street apperance in His second coming. It will be a sky apperance. Any person walks up to you on the street and claims to be Jesus Christ, walk away. Walk away or you will be deceived. Jesus' feet are not even gonna touch the ground during the resserection and rapture. You can read about the resserection and rapture in Ezekiel 37:1-14. and again in 1st Thessalonians Chapter 4(whole chapter).

5:57PM PDT on Oct 9, 2012

Amen Charles, Lou Dobbs is a pathetic excuse for a human being.

And I believe Sesame Street is supported by sales of related toys and such, not getting a penny from the government.

5:36PM PDT on Oct 9, 2012

Anyone see Lou Dobbs crying about the huge sum spent on Sesame St.? He did a bit showing how important it was to get that money back in the hands of the government ( and probably into the hands of the wealthy). It comes to peanuts. He previously, some time ago, showed how little the tax breaks or subsidies given to big oil mattered to the budget. He was comparing about 50 mil to over 4 bil a year. Nice. AND, he's not the least bit ashamed of being a two-faced m-f.

2:19PM PDT on Oct 9, 2012

thanks

1:32PM PDT on Oct 9, 2012

We should get out of all trade alliances, install a $3 million tax per outsourced job, 1 million to the person whose job was destroyed, 1 to the federal government and 1/2 each to the state and locality that ws screwed. Then we should institute a tariff equal to 125% of the diffrence in cost of making it here and there.

If the greedhead scumbags won't do the right thing then they should be forced to.

1:21PM PDT on Oct 9, 2012

Vote Democrat and keep on top of EVERY politician!

12:24PM PDT on Oct 9, 2012

Conservatives like to talk about the evils of "redistribution of wealth" when the entire economic system is set up to "redistribute" wealth from the working and middle class to richest in our society. Conservatives simply do not care about working and middle class people.

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