Thursday, January 26, 2012
Wall Street Journal on Obama's surtax on millionaires -- WSJ makes sense today (as it usually does)
The Wall Street Journal Thursday takes up President Obama on his proposal that “anyone earning more than $1 million pay at least 30% of that income to Uncle Barack”, in a leading editorial called “The Buffett Ruse”, link here, page A16 in print.
By the way, I’ll add that I found a complimentary WSJ on my lawn this morning at reveille, double wrapped in unwanted plastic bags. I am a digital subscriber to get around the paywall (it’s not that expensive).
Of course, taken literally, “Mr. President” (‘s) words don’t compute. If someone makes exactly $1 million in taxable income, does his rate suddenly jump on the entire amount? Better to make a penny less. What about accumulated assets? What about inherited wealth (which western countries subsidize to promote “family values”)? The “death tax” is still a political football and still inspires ire among conservatives, but it allows quite an exemption on the bottom.
Also, what about the alternative minimum tax, which I thought Congress was going to abolish?
The WSJ makes a good argument about double taxation on investment income, because corporate income taxes have been paid already, and because losses in prior years can’t be subtracted.
“Millionaires” often have family businesses that employ other people. It’s important to keep separate money put back into the economy. Every time I go to a locally owned hardware store (to take care of an old “inherited” house) here in Arlington, I feel reminded of that point. Sometimes people work on projects alone that don’t employ others now but are likely to later. I would like to think that’s my position.
Billionaires, well, Buffett, Soros, Zuckerberg all say they have no problem with paying more taxes on money that is not invested back into the economy. That’s where to draw the line.
I still keep thinking that we equate tax policy to moral debate. When I was growing up (in the 50s), “morality” wasn’t much about personal responsibility accompanying voluntary choices, as it was about socialization and sharing the sacrifices and risks that a community (or family) needs to forge ahead. The male-only draft was a leading moral issue in my day. By the late 60s and 70s (after the publicity following Mao’s Cultural Revolution), “fairness” began to shift from personal and “chore sharing” ares back to economic fairness, with the far Left seeing morality in terms of limiting maximum wealth and expropriation. That gradually changed as individualism grew, however slowly at first. Today we seem to be coming full trigonometric circle. Money alone won't keep our world together after pandemics or supervolcano eruptions.