Taxing Themselves, Ctd

Apr 21 2011 @ 5:15pm

A reader writes:

I find it hard to believe that you posted, without comment, Gregg Easterbrook's article accusing Obama of hypocrisy when he advocates for higher taxes on the wealthy while at the same time taking advantage of the existing tax code for himself. Would you ask certain Republicans to voluntarily stop accepting Medicare and Social Security, and to donate a percentage of their paycheck to the Pentagon budget, in order to "prove their sincerity"? Tax has to be a collective agreement, not an individual choice, otherwise the system cannot work, which is exactly Obama's point.

I did call the piece "somewhat glib". Another writes:

Heaven forbid that well-intentioned rich people actually started doing this, it would serve no other purpose than to let everyone else off the hook.  "Well, Obama, Gates, and Buffet are for taxes and spending, so they contribute more. I think the government is wasting money, so I'm not going to contribute."


If Easterbrook's idea had any merit, as opposed to serving simply as a petty snipe, then we could make the entire tax system voluntary.  Let everyone select their preferred level of taxation.  Wouldn’t it be nice if we could specify allocations in terms of percentages as to how we want our tax money spent?  We could state our spending preferences for defense, for health care, education, infrastructure, scientific research, and general welfare.

There is nothing inconsistent or hypocritical about a person being willing to submit to a regime, such as higher taxes, that requires more self-discipline than they might ordinarily impose upon themselves.  This is why people submit to diet programs, exercise classes, personal trainers, or addiction rehabilitation programs.  This is especially true if they believe it has long-term positive consequences for themselves or for society.  Very few people would impose military discipline on themselves when left to their own devices, yet they gladly join the services understanding how the sacrifices involved have a beneficial long term effect both personally and at a societal level.


All wealth is relative, as goods and services (especially luxury items and housing) are priced largely according to what people can afford to, or are willing to, pay.  So if I were a $500k/yr earner and volunteered to contribute another $25k (say an increase of 10 percentage points for earnings over $250k) in taxes while none of my $500k peers did the same, then I will have harmed my (and my family’s) own standing against my peers.  I would no longer effectively be a $500k earner.  To do this would be foolish, and to argue for it is absurd, as it would require an unrealistic degree of selflessness.

On the other hand, if my $500k peers were obligated to also pay an additional $25k, and those making more or less than $500k were also paying higher taxes in proportion, then my relative standing has been preserved.  I remain as wealthy as my immediate peers, albeit somewhat less wealthy compared to lower earners.  That is a much more reasonable sacrifice, and one that many sincere and thoughtful wealthy people are willing to make.