Follow the money.
Why should the rich pay more?
Some say, for the same reason reason John Dillinger robbed banks: because that's where the money is. There is some logic to that, the richest 2% control in the ballpark of 40% of the private wealth in the USA. [note: this is ten years old or more, so we need to update this to 1% and 50%] Others say; "Because they can afford it." Others who complain about progressive taxes say it's because people want "revenge on the rich", or it's "class envy". Or they say, "Why should the successful people be penalized?" That is an interesting take on reality.
But there is one argument that is not often seen, the "follow the money", or follow the tax money argument. Simply put, it says you get what you pay for. It says that if you eat a gourmet meal, you have purchased an entire different meal (not just more of it) than for a McDonald's Happy Meal. We claim that progressive taxes buys Rich Boy toys, regressive taxes buy Poor Boy toys. We say fair is fair. To test this idea, we follow the tax money.
Progressive taxes (such as income taxes) pay mostly for Rich Boy toys: Desert Storm, Cold War, gunboat diplomacy, the Fed's infinite labor pool (WANTED: unemployment) and any related poverty, NAFTA, GAT, free trade agreements, interstate freeways, National Parks, FBI, CIA, a hot-shot standing military, etc. And regressive taxes: (mostly local sales taxes and fees) go for Poor Boy toys: local roads, hospitals, schools, local parks, libraries, cops, city/county councils, fire fighting, etc.
If "toys" sounds too flippant, feel free to swap with a term that rings true for you, such as "tools of the trade", or "economic infrastructures."
To oversimplify a bit, a carpenter does not require the Rich Boy toys, and the CEO of GM does not require the Poor Boy toys. And progressive (mostly federal income) taxes soak the rich, regressive (mostly local sales) taxes soak the poor.
So each Boy is largely paying for his own meal.
Libertarians often argue: TAX IS THEFT!
It's human nature to overestimate one's own powers and to undervalue the help we have received. The toys. Perhaps taxes are like any other transaction. A bundled transaction. When you buy a set of tires or a meal at a restaurant, you are paying for employee theft, drunk employees, security, air conditioning, accountants, and stupid business moves, etc. that you may disapprove of, bundled into the cost of doing business and it's not on your invoice. Bottom line: nobody is forcing you to buy the tires or the meal.
Your choice. You can live like a hermit in a shack, eating roots. If you do not consume the toys, likely you will be poor and owe no taxes. But once you have eaten and grown fat you are now in debt. There is no free lunch.
Some say that the American meal is the best meal in the world. If you have eaten of it, pay your debts, and don't try and sneak out the back door.
...
Beware of the so-called tax cut.
The tax cut is a funny way of managing a household. It's like deciding that you are spending too much money, so you ask your boss for a wage cut.
Perhaps the best way to stop spending too much money is to stop spending too much money. What an idea! Fix or cut the wasteful programs.
Sometimes a tax cut is not really a tax cut. That's because there is no free lunch. If a needed program is blindly defunded, then the money has to come from somewhere. Often if it's a federal program that is defunded, the slack is taken up by local (largely regressive) taxes. What we have is not a tax cut, but a tax shift, from the Rich Boys debt onto the Poor Boy's shoulders.
In 1996 a federal across-the-board "tax cut" was popular in certain circles. Here is how cutting progressive (income) taxes might have affected you: If you made 36K, Dole's 15% "cut" takes $320/year less from you. But if local sales taxes edge up 1% to make up, you just lost money. Beware of the free lunch.
While most Rich Boys don't want the Poor Boys to shoulder their debts, keep in mind that for many of the very Rich Boys, that's part of their job. That's just simple economics.
