This past Saturday a coalition of angry tea party members and fiscal conservatives gathered en masse at the Capitol to protest Tax Day, the day in which American income tax returns are due. The event was organized by Americans for Prosperity, whose self-described mission is to educate the public on economic policy and to enable citizens to become involved in the public policy process. The group was founded with the support of the conservative Koch brothers, the wealthy owners of Koch industries, known for their generous philanthropic involvement in medical research, the arts and education. Jocelyn Webster, spokesperson for the State Department of Administration, estimated that around 2,000 individuals attended the rally.
Today, April 17, 2012, is both Tax Day and Tax Freedom Day, the latter of which is when the average American earns enough money to pay off his combined 29.2% federal, state and local tax bill. What this means is that from January 1 through April 17, the average American worker is not making money for himself. He is working to pay off his annual debt to the government. To put this into perspective, Americans will spend more in taxes in 2012 than they will on food, clothing and housing combined.
It is understandable then, that the common working individual would seek to lift some of this heavy tax burden from his or her shoulders. While I did not attend the rally on Saturday, I will attempt to articulate some of the arguments which I presume were espoused by the tea partiers. I think this is important for two reasons. First, angry mobs are often unintelligible, as shown in the absurdities entertained at the Capitol during the protests against Gov. Scott Walker’s Budget Repair Bill: protestors who chained themselves to the state Senate railings with bike locks, protestors who incessantly beat on overturned plastic buckets and the occasional rainbow-clad neo-hippy protestors who could be found smoking on the Capitol steps. Second, Dane County and Madison in particular are very leftist, and I believe it is important to vanquish the myths surrounding tax breaks.
First, tax cuts do not prolong recessions. To me, this seems to be the greatest fallacy of the left. I hear arguments all the time that follow the line of reasoning that spending is a form of investment and we need to invest to grow the economy. This is a logical argument, as most businesses invest in capital with the intent of producing profit. Where the fallacy arises is the notion that if the government doesn’t spend money, somehow this means nobody will spend it. What happens in reality is that when taxes are cut and the government spends less money, that money goes back into the hands of the people. It doesn’t simply disappear. I’m referring to “the people” in the affectionate, abstract sense that is loved by the left, because a decrease in government spending necessarily empowers the people to make economic decisions for themselves. It gives the people freedom to spend their money as they wish and to invest in things that most directly benefit them. In a word, tax cuts can be thought of as charitable.
Next, tax cuts do not only benefit the rich. I often hear those on the left argue that the rich should “pay their fair share” when they argue for a more progressive tax system. Ignoring the glaring problem of the relativity of fairness, this argument is emotionally derived and perhaps not necessarily logical. Assuming that tax breaks are evenly distributed across the tax-paying base, the average worker now has more money in his pocket to spend on himself or his family. The relatively larger gross revenue decrease induced by the same percentage tax cut to the wealthy simply means that those individuals can further invest in business, which in turn means an increase in jobs and in the economy. Or, those individuals can invest in personal projects or charities, such as James Cameron’s submarine adventure or Bill Gates’ famous charity foundation. All of these economic activities benefit society.
Finally, income taxation is theft. As an individual, I cannot waltz into someone’s house and steal his property. A government, whether state or federal, is constructed to protect the rights of the individual. If a property owner has a right to his property, then the government must protect that right by stopping me as an individual from stealing. It follows by extension then that what the individual cannot do, the government cannot do. If the government is allowed to tax an individual’s income, it is saying that it owns that income, and only allows the individual to keep some set amount. Taxation of income is a moral hazard that says, at threat of forcible arrest, a citizen must give up the fruits of his labor to the government, because the government owns that fruit.
Steven is a sophomore majoring in Biochemistry and Political Science. Please send all feedback to opinion@dailycardinal.com.
