State of Class Warfare

Last night's State of the Union Address was rather dull. The President offered little in the way of anything new. He continued to spin his usual bombast and, while trying to portray himself as a cross-aisle conciliator, continued his divisive rhetoric and class warfare. He even went as far as to acknowledge (and failed to deny) that many might perceive his proposals and language from a polarizing perspective.

As the State of the Union Address and Obama's past record both indicate, class warfare is a key ingredient in the Left's worldview. It is a perspective that relies upon separating Americans into groups—classes—where the supposedly more fortunate have certain responsibilities to members of other classes. The Left tries to portray itself as the defender of the lower- and middle-classes, against the excesses of the uppermost classes. Accordingly, the Democrats attempt to cast the Republicans as defenders of the rich. Naturally, a dynamic develops, a divisiveness and a sort of warfare, of two-sides where the Democrats, from their perspective, try to claim the mantle of defending the average American against Republican-backed elite.

Unfortunately, this plot line is often successfully bought by the media and many in the electorate. But it unfairly distorts the Republican position. The Republicans (at least most) are not defending the rich, but are defending every American's right to own and keep their property.

This is an inclusive agenda. All Americans should be treated the same, regardless of one's income level. Each has the same claim to the product of his work or investment, whether labeled low-income, middle-class, or rich. In fact, the Republican ideology, if allowed, could completely do away with all of these labels. From the perspective of the government and its laws, there should be no class separations. All Americans should be afforded the same rights and should be treated equally under the law.

This stands in direct contrast to the Democratic worldview, which relies upon labels and divisiveness. The Left loves to classify and categorize individuals, grouping them by economic background, race, or other arbitrary division. Each group is then offered unique treatment, privileges, or responsibilities. This separates Americans and creates undue tensions between truly artificial groups.

Grievously, many accept this portrayal of American society. They cannot help but view America through this lens of autonomous and distinct groups, even though there are far more cross-cutting similarities among Americans than there are Balkanized group identities.

Nevertheless, many other Americans see through this distorted worldview. The low-income Republicans that many academics and pundits like to claim consistently vote against their economic interest are a prime example. It is not necessarily true that the so-called rural social conservatives choose social policy over economic interest. Instead many see the Republican economic position for what it is meant to be—a defense of every American's economic interests.

Whether one is rich or poor, it is in one's interest to have a system that believes that the product of each American's work is his or her own property. The government does not, as the Left likes to believe, have an a priori claim on one's income, thus graciously allowing individuals to keep the residual amount after "proper" [arbitrary] redistribution has occurred. Instead, our income and wealth are our own property and we have the right to do with it as we please. Taxes are to be paid to support the essential services that a government must provide, but these should be based on the proper needs of the system and our responsibilities as citizens to meet these needs, not on some arbitrary definition of "having too much."

Obama and the Democrats continue to distort this message, attempting to confuse Americans into believing that somehow some Americans owe something to others. This is simply not true, yet deeply divisive. Americans are in this together. We have one country in which we must share responsibilities and we should have one set of laws that treats everyone the same.

Why Warren Buffett is Wrong on Taxes

Former chairman and CEO of American Express, Harvey Golub, writes on why Warren Buffett and Obama are wrong when arguing for higher taxes on the rich.

What gets me most upset is two other things about this argument: the unfair way taxes are collected, and the violation of the implicit social contract between me and my government that my taxes will be spent—effectively and efficiently—on purposes that support the general needs of the country. Before you call me greedy, make sure you operate fairly on both fronts.

Golub highlights statistics that the top 3% of taxpayers pay nearly 50% of taxes.  He also cites the inefficient collection of taxes - namely due to tax breaks and loopholes given to all sorts of special interests - and inefficient expenditure of taxes - on wasteful and unnecessary programs - to drive his message home.  Golub concludes "Here's my message: Before you 'ask' for more tax money from me and others, raise the $2.2 trillion you already collect each year more fairly and spend it more wisely. Then you'll need less of my money."


But while Golub's argument is fair, there is a more fundamental issue in his essay.  In refuting calls by some of America's wealthiest, including Buffett, for higher tax rates on the rich, he writes:

Others could pay higher taxes if they choose. They could voluntarily write a check or they could advocate that their gifts to foundations should be made with after-tax dollars and not be deductible. They could also pay higher taxes if they were not allowed to set up foundations to avoid capital gains and estate taxes.

The issue here is one of coercion and choice.  Buffett might be right when he calls for the closing of loopholes that give special treatment to certain forms of income or certain individuals, but that does not translate into justification for increased tax rates.  If Buffett feels he owes something to the community, he is more than free to write a check to any institution he feels deserving - including the US Treasury.  However, to argue that tax increases on certain individuals are necessary, because one feels like he is paying too little, distorts the relationship between government and the individual in a dangerous manner.

Income is naturally the property of the individual who earned it.  The government only has the right to take from an individual in order to provide the appropriate services of the state.  In other words, government should minimize its burdens on individuals and should tax only to meet its essential and proper functions (what these functions are is a separate discussion but would include many tasks that cannot be provided by the private market, for instance, defense, security, certain infrastructure, establishing rules and laws, and other pure social goods).  Taxes are thus a pooling of individual property to provide for certain aspects of the common good.  In this manner, taxes could be perceived as establishing or investing in an institution (the government) that provides needed services that would otherwise be unavailable.  Accordingly, all should benefit from this system.

Buffett's and Obama's argument turn this conceptualization on its head, arguing that the appropriate level of taxes is rooted not in the need to pay for essential functions but in an arbitrary determination of what an individual should possess.  Under this understanding, income (or wealth) is not the natural property of the individual, but is awarded to them based on their need.  Any amount that surpasses this arbitrary definition of need does not rightly belong to the individual and must, to be fair, taken away.  Taxes are thus used to 'level the playing field'.  The individual, whether rich or poor, now lives at the goodwill of the state, allowed to possess only due to the graces of leviathan.  In fact, taken to the extreme this argument does not even require the government to provide anything.  If taxes are justified by taking 'excess' from those who have it, the government has achieved its goal of taxation (this is not to say the government does not have other goals) simply by taking the money.

Taxation is a tool needed for the government to achieve its proper functions.  It is not a goal unto itself.  To assume otherwise is to break down the very fabric of a capitalist, free-market, liberal society and sets dangerous precedents.  It is certainly appropriate to debate how tax burdens should be carried by different segments of society, but it is far too dangerous to allow such discussions to distort the purpose of taxation.  Taxes are a government's paycheck or its alms - not a tool for social engineering.