Thursday, February 16, 2012

Taxes

From the Washington Post, here's a chart comparing the proposed income tax rates under President Obama's proposals with those under candidate Mitt Romney's:

Ezra Klein's column points out the differences in  terms of percentage of GDP taken in taxes under each proposal. We are at near-historic low levels of income taxation today, and those taxes would increase somewhat (as a percentage of GDP) under both proposals (though not to the levels we experienced during the Clinton administration). Romney would raise taxes only slightly less than Obama. So first off, we should probably rein in all the rhetoric about how the Republicans are going to cut taxes while the Democrats are going to embark on some mad socialist redistribution scheme. The truth is that most people aren't going to notice a big difference regardless of which party assumes power.

What jumps out at me from this chart, however, is the difference in how the tax burden would fall. Again, not a dramatic difference. Obama would raise the top rate to 36%, still less than under Clinton, and WAY less than under Eisenhower, when the top marginal tax rate was more than 90%, while Romney would lower the top rate to 26%. Romney would also raise the rate slightly for the bottom 60% of earners, while Obama would raise it a bit for the top 20%.

I'd love to hear Romney explain why the rich should pay a smaller percentage than they do now, while the poor should pay more. "It's because we want to reduce the burden on the job creators," I'm sure he'd say, "and that will benefit everyone."

So I guess the Republicans think the wealthy are slacking off now in their job-creating activities, because of the heavy burden of taxation. These members of the top 1% are saying to themselves, if only I didn't have to give nearly 35% of my income to the government, I'm sure I'd go out and hire a whole bunch of employees. Right now I just don't have the incentive to do that. It's tough being rich, I guess, because you just never have enough money. If the rich could keep more of their money, they'd work much harder. Of course we would have to trust that these wealthy people wouldn't use their extra cash to take fancy European vacations, or buy luxury foreign cars or invest overseas, but I'm sure hardly any of them would shirk their patriotic duty to spend all their additional wealth on beefing up their staffs.

What about the bottom 60% then? That's a different story, I imagine Mitt would say. The problem with those people is they get to keep too much of their money. The government needs to take a bigger percentage, so they will feel more like contributing members of society. If they have a little less money to buy groceries or pay the rent, I'm sure that will help build their characters.

Bottom line: if you believe rich people don't have enough money, and poor people have too much, you should vote Republican, because as the chart makes plain, their plan is to let the government take more from the poor, while the rich get to keep even more of their wealth. If you think the rich should contribute a bit more to the general good, while the poor should bear a proportionately smaller burden, then vote Democratic.

1 comment:

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