William Voegeli has an interesting essay in Commentary on why the Left’s class warfare rhetoric does not go over well in the States: “Americans Don’t Hate the Rich.” After Bernie Sanders’ hours long tirade in the Senate yesterday, you might think differently, but fortunately the ideological orientation of Vermonters is something of an outlier. It is a shame that those Green Mountain gringos have such kooky political ideas; they are otherwise quite charming.
What Voegeli does not really address is the issue of justice. Conservatives seem to have ceded the moral high ground on taxation to the Left. I certainly will not give the redistributers an inch. The confiscatory regime that robs Peter to pay Paul (or as someone once told me, robs Peter to pay John to provide counterproductive services to Paul) is not just—for reasons that I explained in my post “Redistributionism.” I am committed to the classical idea that private property exists for the common good, but the government managed transfer of wealth from one group of citizens to another group of citizens is wicked. If the rich suffer pangs of conscience because of their fortune, let them do as the rich have always done—practice philanthropy. I certainly trust the wealthy to donate their money more responsibly for the sake of the public good than weaselly politicians and the hordes of self interested bureaucrats hungry for more opportunities to slice fatback from the body politic.
Here is an idea that I find objectionable but still far better than the typical statist socialism that we have been somewhat practicing for generations. If we are so concerned about the accumulation of wealth and if we demand that the rich expend more of their income on others, then we could craft a tax policy that requires philanthropy. We could have a flat income tax rate of ten percent, with no loop holes, deductions, or exemptions, which could be coupled with a ten percent sales tax. Dividing the tax scheme between the two would encourage savings more than our current income tax regime but still garner more money from the wealthy by retaining the income tax, albeit at a lower rate. Ridding the tax system of special incentives and exemptions would remove the government from ruining the country more with faddish social policy enforced through the tax code. It would also remove much of the temptation for corruption and special interest lobbying, as every corporate entity wants tax policies that will support its narrow interests.
Such a flat tax would be fair, and poorer Americans would not get a free ride on public services, courtesy of the wealthy. Beyond this, we could still have “progressive” (sic) brackets for income levels that dictate the percentage of one’s income that must be given away to non profit institutions. Therefore, the tax bracket system would look like our current one, but instead of paying taxes to the government, we would be able to donate to charities of our own choice after we fulfill the flat tax obligation that everyone shares equally (as a percentage). Moreover, the government already designates which organizations qualify as non profits, donations to which are tax deductible. If someone is unwilling or unable to donate the required amount, the government would get the money as a normal tax. To please the socialists like Sanders, we could even set the highest bracket at fifty percent of income; to take more than half at the federal level seems quite inappropriate unless severe, extraordinary circumstances demanded it. Of course, I would prefer lower rates, certainly at or lower than whatever economists predict the maximal Laffer Curve rate to be in the current circumstances.
While this tax regime is unfairly confiscatory, it puts the power of redistributionism in the hands of the person from whom the money comes. It is forced charity, but it would retain more of the good qualities of private charity than the welfare state, which engenders an entitlement and resentment personality among beneficiaries. It also keeps the state from gaining influence over people’s lives, thereby significantly reducing the dangers of soft (and not so soft) totalitarianism. If we must have state mandated redistribution of wealth, at least let the wealthy contribute to the common good as they see fit. Imagine how much better a city would be with more parks, art museums, free concerts, and specialized schools than the current ones where public money is continually flushed down the “war on poverty” hole while the public sector unions enrich government employees from the treasury. More cellists and less social workers? Schools that demand excellence? Opportunities for poor boys to learn a trade or pick up useful skills rather than remain captive in an educational environment run by morons and charlatans that purports to bring enlightenment to children with intelligence quotients one to two standard deviations below average? It could happen if we trusted the givers to determine the money flow rather than the politicians and the entrenched bureaucracy.