Making The Tax Argument

I listen to NPR every day during rush hour. One of the things that's gotten on my nerves this campaign season is the way every pundit seems to blindly assert, over and over again, even in conjunction with issues that have nothing to do with taxes, that, "under Obama's tax plan, 95% of American will get a tax cut." They’ve literally acted as a mouthpiece for the Obama/Biden campaign, at least as far as tax proposals and their alleged impact are concerned. I’m not going to get into whether taxes will be higher or lower on the average American under a Democratic-controlled government. That answer should be obvious. I want to focus on the “95%” figure and our current, progressive tax system. As regular readers know, I've covered this territory before and have no desire to jump back into the deep end of it. All I want to point out is that more than 40% of Americans don’t pay income taxes each year when all their paperwork is finished. So about half of Obama's "95% of Americans" will actually be getting a welfare check.

The NPR pundits (and commentators the world over) can't seem to understand why the poor and middle class wouldn’t want a place at the government feeding tube. They’ve convinced themselves that everyone votes according to their economic caste, all the while ignoring the multimillionaire politicians and entertainers that lobby for higher taxes on themselves. "What's the matter with Kansas," they ask. Well, the answer is that most Americans have a basic sense of fairness. They believe in ownership and rights. Although they don't mind paying for a safety net for the less fortunate in our society, they're still troubled when they realize politicians are willing to steal half (or more) of an honest man's wage. If you're willing to steal from one group, your appetite for free money will only grow. People understand this, and they’re uneasy with the idea that if they go to work at 8:00 am, they won’t make ‘take-home pay’ until after lunch. They know that every pie-in-the-sky program the Democrats have promised this election season can’t be funded solely by the mega-rich. Honestly, I’m shocked when every Democratic politician proposes a laundry list of multi-billion dollar programs, and then says with a sly grin, “the programs will pay themselves when we raise taxes on the oil companies and the wealthiest of Americans.”

But there’s a large subset out there that, like NPR's show hosts, blindly parrots the Obama campaign’s claims. This group doesn’t see anything wrong with wealth redistribution as a principle (I don’t), and they don’t understand why anyone might have a problem with wealth redistribution as a practice (I do). So here are few oldies-but-goodies that help explain what's the matter with Kansas, and why the word “wealthy” isn’t necessarily synonymous with “greedy,” even among our lower and middle classes:

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I especially like this one about the compulsory redistribution of wealth:

A young woman was about to finish her first year of college. Like so many others her age, she considered herself to be a very liberal Democrat, and was very much in favor of the redistribution of wealth.

She was deeply ashamed that her father was a rather staunch Republican, a feeling she openly expressed. Based on the lectures that she had participated in, and the occasional chat with a professor, she felt that her father had for years harbored an evil, selfish desire to keep what he thought should be his.

One day she was challenging her father on his opposition to higher taxes on the rich and the addition of more government welfare programs. The self-professed objectivity proclaimed by her professors had to be the truth and she indicated so to her father.

He responded by asking how she was doing in school. Taken aback, she answered rather haughtily that she had a 4.0 GPA, and let him know that it was tough to maintain, insisting that she was taking a very difficult course load and was constantly studying, which left her no time to go out and party like other people she knew. She didn't even have time for a boyfriend, and didn't really have many college friends because she spent all her time studying.

Her father listened and then asked, "How is your friend Audrey doing?" She replied, "Audrey is barely getting by. All she takes are easy classes, she never studies, and she barely has a 2.0 GPA. She is so popular on campus, college for her is a blast. She's always invited to all the parties, and lots of times she doesn't even show up for classes because she's too hung over."

Her wise father asked his daughter, "Why don't you go to the Dean's office and ask him to deduct a 1.0 off your GPA and give it to your friend who only has a 2.0. That way you will both have a 3.0 GPA and certainly that would be a fair and equal distribution of GPA."

The daughter, visibly shocked by her father's suggestion, angrily fired back, "That wouldn't be fair! I have worked really hard for my grades! I've invested a lot of time, and a lot of hard work! Audrey has done next to nothing toward her degree. She played while I worked my tail off!"

The father slowly smiled, winked and said gently, "Welcome to the Republican Party

And here’s another one about our progressive tax code and tax cuts:

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes,it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. ‘Since you are all such good customers,’ he said, ‘I’m going to reduce the cost of your daily beer by $20.’ Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free.

But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his ‘fair share?’

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:
The fifth man, like the first four, now paid nothing (100%savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

‘I only got a dollar out of the $20,’declared the sixth man. He pointed to the tenth man,’ but he got $10!’

‘Yeah, that’s right,’ exclaimed the fifth man. ‘I only saved a dollar, too. It’s unfair that he got ten times more than I got’

‘That’s true!!’ shouted the seventh man. ‘Why should he get $10 back when I got only two? The wealthy get all the breaks!’

‘Wait a minute,’ yelled the first four men in unison. ‘We didn’t get anything at all. The system exploits the poor!’

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill.

And here’s the Aesop fable re-write:

The Original Fable:

The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks he's a fool and laughs and dances and plays the summer away. Come winter, the ant is warm and well fed. The grasshopper has no food or shelter, so he dies out in the cold.

The Fable as Translated into Our More Modern, More Liberal Society:

The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks he's a fool and laughs and dances and plays the summer away. Come winter, the shivering grasshopper calls a press conference and demands to know why the ant should be allowed to be warm and well fed while others are cold and starving. CBS, NBC, and ABC show up to provide pictures of the shivering grasshopper next to a video of the ant in his comfortable home with a table filled with food. America is stunned by the sharp contrast. How can this be, that in a country of such wealth, this poor grasshopper is allowed to suffer so? Kermit the Frog appears on Oprah with the grasshopper, and everybody cries when they sing, "It's Not Easy Being Green."

Jesse Jackson stages a demonstration in front of the ant's house where the news stations film the group singing, "We shall overcome." Jesse then has the group kneel down to pray to God for the grasshopper's sake. Howard Dean & John Kerry exclaim in an interview with Peter Jennings that the ant has gotten rich off the back of the grasshopper, and both call for an immediate tax hike on the ant to make him pay his "fair share." Finally, the EEOC drafts the "Economic Equity and Anti-Grasshopper Act," retroactive to the beginning of the summer. The ant is fined for failing to hire a proportionate number of green bugs and, having nothing left to pay his retroactive taxes, his home is confiscated by the government. Hillary gets her old law firm to represent the grasshopper in a defamation suit against the ant, and the case is tried before a panel of federal judges that Bill appointed from a list of single-parent welfare recipients. The ant loses the case.

The story ends as we see the grasshopper finishing up the last bits of the ant's food while the government house he is in, which just happens to be the ant's old house, crumbles around him because he doesn't maintain it. The ant has disappeared in the snow. The grasshopper is found dead in a drug related incident and the house, now abandoned, is taken over by a gang of spiders who terrorize the once peaceful neighborhood.

And finally, the republican and the waiter:

A republican businessman was on his way to lunch. A few doors down from the restaurant, he spotted a homeless man with a sign that read, “Vote Obama, I need the money.”

The man rolled his eyes and continued on his way. Once inside the restaurant, his server came to the table wearing had an 'Obama 2008' t-shirt and took his order.

The republican man asked the waiter, “why are you supporting Obama?”

The young man answered, “because he’s going to change America so it’s more fair.”

The republican asked with a confused look, “what do you mean by more fair?”

The waiter confidently answered, “Obama’s going to make it so that the people who need help get it, and so that the greedy start to pay their fair share.”

The republican simply replied, “oh, I see,” and rolled his eyes once again.

When his lunch break was over, the republican finished his meal, left some cash on the table, and headed for the door.

As the man reached for the door, he heard the waiter yell, “excuse me, sir, but I think you forgot the tip.”

The republican turned around, smiled wryly, and said, “I’m going to redistribute your tip to someone who needs it more than you.”

“What?” screamed the waiter.

“You see that homeless man out there on the sidewalk,” the republican man asked as he pointed toward the window. “He needs that five dollar bill more than you do.”

“Him,” shrieked the waiter. “He just sits out there every day and begs for money. Then he blows it all on liquor and cigarettes! I’m working my way through college. Anyway, I earned that tip. It’s mine.”

“The man rolled his eyes a third time and sighed, “stop being so greedy.”

I hope these help. You might not change many minds before the election, but at least you'll make a sound argument.