Higher taxes

Victor Davis Hanson on the current class warfare being promulgated by the administration:

The usual liberal complaint against the conservative opposition to higher income taxes is greed and the better-offs’ self-serving reluctance to pay their “fair share.” But while perhaps true in some instances, I don’t think that is an accurate writ against most of those in that now demonized $200,000 and above categories who resent forking over more. Rather, here are a random 12 complaints that I hear from those who become furious about preposed higher income tax rates:

1) The Entire Bite

The most common lament is that taxes are already too high for those who either chose not, or do not have the resources, to find loopholes. I know that pre-Reagan top-bracket rates were often between 70%-94%; but few paid at those rates given the myriad of former deductions. At first glance, 33-35% federal top rates do not seem that steep; but income taxes do not fall in isolation. Many of the higher-income payers are small business people and self-employed professionals, who pay 15.3% in FICA and Medicare taxes on a sizable and growing portion of their income. And that portion and the rate itself always go up, never down. In 2013 a surcharge will hit those in the now near “criminal” $200,000 and above brackets. Many of the top incomes (believe Sen. Schumer, not me) fall in high-tax states like New York and California, where state income taxes can hit 10%. Add in property taxes on homes and businesses, and it is not hard to envision a theoretical 50% + rate, or over half one’s income. So, the conservative asks, at what total rate would local, state, and federal governments be happy — 60%-70%-80% of annual income?

2) Inequality?

Liberals reply that income inequality is worse than ever. (Note here in their own lives they have no problem with other “merit”-based inequality: e.g., Why can’t Johnny Depp turn down a couple of roles so other less fortunate actors could star? Why doesn’t Cornel West at last break up his endowed mega-salaried professorship into three or four lectureships for the struggling part-timers? Why doesn’t Maureen Dowd go down to one column every other week to allow less compensated New York Times op-ed writers a chance to catch up? In other words, why not back off from the trough and let others have a go?) But back to income inequality: some of those figures are not just attributable to the proliferation of $200,000 orthodontists, but to factoring in the mega-fortunes of a Johnny Depp ($50 million last year in income alone) or a Warren Buffett. The onset of a globalized market allowed a new top bracket to make tens of millions of dollars, a world away from the lesser professional. There is no aggregate homogenous group of “the wealthy.” My big-farming near neighbor (500 acres in vineyard plus), who probably nets $300,000 on a rare good raisin year like this one, is a world away from the late Steve Jobs or the thousands of million-dollar-plus incomes in Silicon Valley. This incongruence is not a rhetorical point or special pleading, but evident through the president’s own rhetoric: “Millionaires and billionaires” is a deliberate attempt to weld two disparate groups together — one making 1000 times the other (if the president is talking of annual income), or one worth 1000 times more than the other (if the president is talking about net worth). But is the Menlo Park bungalow owner who teaches at Foothill College and might be “worth” $1 million (given housing inflation) really comparable to Meg Whitman? Mr. Obama knows that there is not enough of the 1% of the 1% to come up with enough revenue to cover his new $4 trillion in debt, but does he think that by going after the top 5% or 10%, well, there just may be?

Read the rest here.