Sunday, October 2, 2011

"More Prosperity" or "Shared Sacrifice"?

The NJ Star Ledger took NJ Governor Chris Christie to task concerning remarks he made in his recent Reagan Library speech. The clash points to the two fundamentally different worldviews that animate today's Left-Right debate about the political/economic future of America.

The Left's view was summed up by Elizabeth Warren, who recently advanced the view that no one succeeds on his own, and thus success translates into a societal claim on "a hunk" of that success:

There is nobody in this country who got rich on his own. Nobody.

You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.

Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

Don Watkins of ARI more accurately called Warren's "social contract" a social shakedown, and Ari Armstrong shreds her argument in an op-ed in Pajamas Media.

In the Star-Ledger editorial, the editors echo Warren's point, and one correspondent actually quoted Warren in the comments section. What triggered the editorial were these comments by Christie:

“Telling those who are scared and struggling that the only way their lives can get better is to diminish the success of others. Trying to cynically convince those who are suffering that the American economic pie is no longer a growing one that can provide more prosperity for all who work hard. Insisting that we must tax and take and demonize those who have already achieved the American dream.

“That may turn out to be a good re-election strategy for President Obama, but it is a demoralizing message for America.”

"Clue phone for the governor," advise the editors, "America is not demoralized by the notion of increasing taxes on top earners. Polls show that big majorities support the idea. Some even show that most Republicans do."

That's right: Let's raise taxes, but only on the other guy. That's not demoralizing. Hypocracy is OK, if the majority says so.

Why should we raise taxes only on the rich? The editors, in part, had this to say:

The reason is that we need the money. We are entering a period of national sacrifice and most feel it should be shared.

It’s remarkable that Christie can look across the American landscape today and conclude that our priority should be to protect the interests of those at the top of the pyramid, the one group that is doing okay.

It is especially galling to hear this from Christie, who raised taxes on the working poor by cutting their tax credits. Are they better able to take the blow?

Remember, too, that businesses didn’t earn their money without help from taxpayers. They use public roads and rails, they rely on police protection, many of their employees were educated in public schools, and they enjoy the social peace that comes from a shared sense of fair play, a social contract.

The "tax credits" referred to is the Earned Income Tax Credit, which generally means a "refund" for those who owe no income tax. Under our convoluted tax structure, I'm not necessarily opposed to the EITC, since low earners do pay other taxes. Absent major tax reform, I don't necessarily agree with cutting it at this time. But let's not call it what it's not - a sacrifice.

I've left the following comments:

Posted on September 29, 2011 at 10:19AM

The Left is apparently circling the wagons around the welfare state, as the points made in this piece are suddenly cropping up around the media. But, they are a feeble attempt that runs straight up against logic, facts, and morality.

There is no “shared sacrifice”. The reduction of a handout (the earned income “tax credit”) is not a sacrifice, since one can not lose what one doesn’t rightfully own to begin with. Taking one’s earnings by force of a tax increase is.

Businesses provide far more benefits to “the taxpayers” through the products they provide and the jobs they provide than they benefit from them. Furthermore, the editors conveniently forget that businesses are huge taxpayers themselves, and they pay more than their share to fund public roads and rails, police protection, and public schools. Furthermore, businesses pay additional moneys for private security and employee education and training.

The IRS provides readily available data that shows that the top 1% already pays 40% of all income taxes, and the top 10% (which starts at about $120,000 annually) pays 70%, while the bottom 50% pays virtually nothing. Even including payroll taxes, the figure for the top 10% comes in at about 50%. And speaking of payroll taxes: Yes, it is unfair that the lower earners must pay for Warren Buffet’s healthcare and retirement. So, how about ending that travesty by privatizing Social Security and Medicare so that every workers earnings goes into his own personal account, rather than laundered through Washington and into the pockets of retirees who are capable of taking care of themselves?

The true mindset of the Left is revealed here. Why must “we” tax the rich more? “The reason is that we need the money”. Why go after the rich? Because they’re “the one group that is doing okay”. In other words, need is a license to steal, and – as Willie Sutton said – “that’s where the money is”. The Left’s mindset is that of a street thug, and they don’t even try to hide it any more. Christie is absolutely right, and the editors just gave us the ringing proof. The Left doesn’t want more people “doing okay”. They want shared poverty. It’s a moral travesty.

The regulatory welfare state soared over the last 11 years, and today is bigger than ever – at the very time when the struggles of the vast middle class multiply. The Federal government is consuming 25% of GDP as spending and deficits reach unheard-of heights, even when compared to the Bush profligacy. By now the village idiot can see what the increasingly desperate ideologues of the welfare state refuse to see or admit. The welfare state is destructive to prosperity, morality, the economy, and the middle class – and today, throughout the West, is coming to its inevitable dead end.

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