The top 400 American taxpayers pay more in federal taxes than the bottom 70 percent of U.S. taxpayers combined. The previous truth is a friendly reply to Cliff Asness and Michael Mendelson’s recent Wall Street Journal opinion piece in which they critiqued Mitt Romney’s surely misguided call to tax rich people like him more.
In Asness’s inimitably entertaining style, the two helpfully took apart Romney’s thinking without making it personal. It was in their conclusion that Asness and Mendelson arguably faltered.
They wrote, “Mr. Romney, please write an essay arguing that barring large cuts to entitlement spending, the federal government will have to tax everyone more,” after which they asked Romney to “Present the actual, honest and difficult choice to the public,” which includes them telling Romney to “Go ahead and say, ‘Rich guys like me should pay the most and even lead the way.’”
The conclusion didn’t read right. As argued in The Deficit Delusion, without excessive taxation of the rich there’s quite simply very little debt.
It’s often said that the $38 trillion (and counting) debt payment plan will eventually include taxation of the poor and middle, but the argument is more rhetorical than real. To see why, all readers need to do is contemplate the amount of non-mortgage debt the bottom 70% of taxpayers have...
If you take the rich out of the taxation equation, there’s realistically no debt nor are their large entitlement concepts to think of. Money is ruthless as Asness and Mendelson know very well, and just as the earnings of poor and middle earners don’t rate a lot of borrowing individually, they don’t rate much collectively. Budget deficits and the national debt are a logical consequence of Congress having excessive taxable access to the wealth created by the most enterprising people on earth.
Precisely because Asness and Mendelson were acting toward Romney with utmost decency, they conceded to him that there are loopholes and “caverns” exploited by the rich. Maybe, but as evidenced once again by how much those at the top of the U.S. economic pyramid account for total federal tax revenues, Romney is overstating his case by many miles. In other words, Asness and Mendelson are being too kind to Romney.
Which brings us to the most troubling aspect of their piece. They encourage a debt reduction essay by Romney that would include the line “’Rich guys like me should pay the most and even lead the way.’” No!
A tax on Romney, Mendelson or Asness is a tax on every single American when it’s remembered that government spending is truly harmful as the central planning of precious resources generally is. Without knowing Mendelson’s lean, Asness is a libertarian. It’s difficult to fathom him wanting to get more tax revenue to the federal government, and if it’s about paying off the debt, there’s no evidence from the last 45 years that showering Treasury with more revenues brings it down. Quite the opposite.
Only for the agony to be magnified. A tax collector known to have deep access to the pockets of the rich can borrow against their present and future wealth with ease. Translated, increased taxes on the rich enable ever-growing government that we all must suffer.
It’s a friendly comment to Asness and Mendelson that offering up their fellow .00001 percenters as the solution to deficit and debt question isn’t very friendly, nor will it work. Much worse, it sounds like Mitt Romney.
