soak the rich — and we all suffer.

liberals and conservatives love to argue about many things, but one issue that produces violent disagreement most often is the question of the redistribution of wealth by government largesse. who decides where the money goes? do we trust them to make smart decisions? judging from what we have seen so far, we are not getting much benefit from the taxes we are paying. at least in some socialist systems, you get healthcare or vacation benefits out of the 30-50+% you pay into that system. this is not to suggest that those socialist countries have discovered something worth copying here in the united states. not at all.

an excerpt from this post on voice potential makes a strong case:

Today, our highest income bracket is truthfully around 40%, a rate that has increased steadily since that time. It’s often been said that the wealthiest 20% in the country bear almost 70% of the tax burden. Think about that. Think about all that money that could be reinvested in industry, used to start companies and create more jobs. Then, look at the alternative: a government that parasitically wastes money takes some, skims a little of the top, pays several bloated salaries and distributes a fraction of it back to the poor. Instead of believing in the power of Capitalism, which consistently has proven itself, liberals choose to follow the path that gives the government more and gives the poor less. The economic impact of an unruly tax burden is not only obvious, it’s crippling.

And sadly, Americans are blind to the real tax burden we face. When we tax industry, who do you think actually pays those costs? It’s definitely not CEO’s and boards of directors of these mega-corporations. No. It’s you and me. They roll the taxes into the price of goods and services, passing them along to consumers. So, when you buy that hammer from Home Depot, you’re paying for the taxes on steel, the taxes on the lumber company who purchased the wood, the property taxes for the land to grow the timber, the environmental taxes levied on the steel mill and the lumber mill, the gas taxes on the trucks, the sales tax on the sale of the hammer to Home Depot and the sales tax when you buy the hammer. And if you don’t think that adds up, you’re not paying attention. Bloated, ridiculous taxes like that don’t just negatively affect the wealthiest 10%, they affect all Americans, even the poor.

the fact is that we end up paying for those high corporate taxes, not the businesses, who conveniently include the cost of these taxes in the prices of hammers, cheeseburgers, and so on. dan mitchell at agrees.

chris demuth has an excellent piece at the american enterprise online called unlimited government. i recommend reading all of it, even though it is longer than the average blog post. i will quote a few paragraphs from it here.

Second, the principle of limited government is not a bit less urgent today than it was two centuries ago. It has now been 25 years since Ronald Reagan arrived in Washington announcing his intention to “check and reverse the growth of government.” That quarter century has been governed mainly by Republican Presidents, and increasingly by Republican legislatures, and even the one Democratic President declared that “the era of big government is over.” Yet the federal government’s annual domestic spending doubled during the period, from about $900 billion to about $1.8 trillion (in 2000 dollars). Today the federal government’s fiscal imbalance—the excess of projected future expenditures over projected future revenues—is close to $70 trillion. About $20 trillion of this enormous sum was tacked on just in 2003, with the addition of a massive, unfunded Medicare entitlement to prescription drug benefits. Increasing taxes to pay for our standing policy commitments would move U.S. rates to the levels prevailing in today’s socialist European nations.

YIKES. many socialist european nations are seeing the negative effects of that policy on their country’s economy. if we don’t do something about spending now, we will see the same negative consequences on our economy that europeans, specifically france and germany, are experiencing. we can learn from our european friends an important lesson– what not to do with tax policy.

In recent years, with the Republicans in charge of both houses of Congress, domestic expenditures (even excluding post–9/11 “homeland security” spending) have been growing faster than during the previous two decades of divided government, and the incidence of pork-barrel projects has reached an all-time high. The 2001-2005 period marks the transformation of the Republican Party from its traditional role as a win-or-lose guardian of limited government to that of a majority governing party just as comfortable with big government as the Democrats, only with different spending priorities.

exactly. the republicans have lost their way and forgotten their small-government roots. this could be one way to attack them in ’06, if the democrats could make coherent arguments about this, and about illegal immigration. these will be key issues. the first party with a plan to tackle some of these things, and with a positive vision for the country, will be the party that will be successful in ’06 and ’08. (it would also help if potential presidential candidates divorced themselves from Kos and democratic underground, but i won’t hold my breath on that…)

if the government didn’t waste our money, it wouldn’t need so much of it. we have to look at all spending to see where we can make cuts, and insist that those changes become permanent. i have heard the argument for increases in social program spending by the government, and what cold-hearted person could be against such a thing? if you really care about the poor, the unemployed, and the homeless, wouldn’t you want them to receive the most money possible to help them get back on their feet? of course you would. the question is: which group would be able to provide the most resources, private charities or the government? while i will grant that non-profits are not always the most frugal with the money we give, our money still goes much further toward meeting our social obligations with them than with the government.

ok…i’m stepping off of the soapbox now. 🙂 your thoughts?

Unlimited Government — chris demuth
America’s capitalist system is creating more wealth and higher incomes— dan mitchell
inherent faith of liberalism — mark ervin of voice potential