All tax plans are wealth redistribution
Joe the Plumber doesn't like a tax plan that "spreads the wealth around," which Sen. John McCain calls socialism. But commentator Will Wilkinson says all tax plans, even McCain's, are by nature wealth redistribution.
Commentator Will Wilkinson (The Cato Institute)
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TEXT OF COMMENTARY
Renita Jablonski: Joe Wurzelbacher, aka "Joe the Plumber," has become something of a celebrity. It's all thanks to his opposition to Barack Obama's plan to increase taxes for people making more than a quarter-million a year. Wurzelbacher in particular slammed Obama for wanting to quote "spread the wealth around." Joe and John McCain have called that socialism. But commentator Will Wilkinson says all tax plans, even McCain's, are by nature wealth redistribution.
Will Wilkinson: If you ask Joe, the money Joe's earned is Joe's money, and it should be up to Joe, not the government, how to spend it.
Well, I'm on your side Joe. Sort of. I dream of a government limited to a few essential functions with a minimum of redistribution. Sadly, no major candidate is offering that.
In the system we have, as opposed to the one you and I might want, democracy just is one big machine for spreading the wealth around. The real question is how much of whose money is taken, and who gets it. Politics gets nasty because everyone wants to control the business end of the tax-and-spend stick.
Joe, Did you, like John McCain but unlike Barack Obama, support the invasion and occupation of Iraq? Well, that's cost taxpayers over a trillion dollars so far, and has, like it or not, spread a whole lot of wealth to defense contractors.
What do you think of McCain's proposed $5,000 family health care tax credit? It might be a great idea, but it's not a way of not spreading wealth. The wealthiest 5 percent pay almost 60 percent of all federal income taxes. They'll be footing most of that bill, too. And if you're sniffing around for socialism, why not try Gov. Sarah Palin's Alaska, where every year the state pays residents equal shares of state-owned oil revenues?
The one thing McCain and Obama seem enthusiastically to agree on, "energy independence," would spread wealth from consumers and taxpayers to politically favored energy firms. The big difference is which companies gets the subsidies.
Joe, if you're listening, I feel your pain. Because it's worse than you think. There's no way out. My guess is that under McCain's slightly more pro-growth economic policies, there may be a bit more wealth to spread, and the weapons manufacturers will be secure in their meaty share. Under Obama's policies, the ethanol racket is safe, labor unions may see their fortunes rise, and even you get that middle-class tax cut.
If you can plumb the depths of that choice, Joe, give me a call.
Jablonski: Will Wilkinson is a research fellow at the Cato Institute.
Comments
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From newjersy, PA, 02/17/2009
The statistics speak for themselves. Only 62 percent of Americans pay federal income tax, meaning that 38 percent get a 100 percent refund of any taxes withheld. So Mr. Obama's 95 percent that will receive money from the government includes roughly 33 percent of Americans who pay no income tax. One-third of Americans pay no income taxes yet would receive a government check of perhaps $1,000 or more. ------------------------ alex mls listings
From Clover, SC, 10/24/2008
Re: Maureen Riley's comments on my use of grammar...
First of all, I would like to point out that you are completely off-topic. Your comments on my post is a perfect microcosm of how the liberal media is scrutinizing "Joe the Plumber". Shortly after Joe confronted Senator Obama on his socialist economic policies, the liberal media was digging up any dirt they could find on Joe. All the liberal media could find on Joe was that his first name is not really "Joe", that he owed back-taxes, and he was not a licenced plumber yet. None of the before-mentioned is relevant to what Joe was asking Senator Obama. None of what you wrote in your reply to my original post is relevant either...
That being said, you are correct. I did have a couple of typos, and over-used commas. I even typed, "American Public Radio", when it was "National Public Radio" that I was listening to. When I typed that post I had just got home from a hard days work in construction, and my children were anxious for me to get away from the computer to play with them. Please accept my apology for not having the time to proof-read what I had typed...I had no idea that my blatant mis-use of grammar was that offensive. After all, I am a product of the American public school system, with which the teachers are about 90% Democrats...
From Ellsworth, ME, 10/24/2008
Ms. Taha has every right to be proud of her and her husband's accomplishments. I admire the effort they made and the hard work they undertook. But she loses me when she pretends this was in a vacuum. She's upset at paying taxes when the poor pay nothing. But when she was poor, did she not benefit from that system? Their reduced tax burden was certainly one way the wealthy assisted by shouldering a heavier tax load. But now that they have their own tidy bundle, they resent the same system that helped them when they needed it. Just because they did not receive food stamps or unemployment benefits (while being mum on whether or not they were eligible), does not mean they did not benefit from government assistance through a tax structure that lessens the burdens on the poor. If they received those benefits from other wealthy tax payers, why should they grumble about doing the same for the current poor, hard-working families trying to better their lots?
From Louisville, 10/23/2008
Both parties want to confiscate your income. Republicans want to borrow even more money to fight wars. They fool voters with "low taxes", while they charge and spend, exploding the debt and degrading the currency. Democrats want to give you cradle to grave service whether you want it or not. They take from the rich and give to the poor, which works as long as productive people keep working, or republicans return.
When one party does a terrible job, they know they will lose a few elections, but will be back in power soon enough. No other party is allowed to get a foothold. In business this is called a duopoly and it is very profitable.
How much income should the government confiscate? Is $3 or 4 trillion per year enough for the president and congress to take and spend?
Should we keep borrowing half a trillion dollars per year or more for wars and other government spending? When our debt is $20 trillion will we be able to pay the interest? Will the US government have to repudiate its debt one day and start over?
Will the American people be better off if the government takes $6 or 8 trillion each year? Is the US really a democracy if the government takes 1/2, 2/3 or 3/4 of the total national income? Doesn't that mean you are merely working to support the government?
Can the government spend your money more wisely than you can? If you now work 5 months per year to pay your taxes, will you work 8 or 9? If the government takes half of your income when you are alive and half of what is left when you die, this means you worked from January to September for them and only 3 months for yourself and your family. What will happen if most of the 79 million baby boomers decide to retire in 2009 instead of working and paying taxes?
If government takes too much, productive people will stop earning income. They will stay home. Why start or expand a business, if when you succeed you forfeit 75% to the government?
The answer is to shrink government and pay off the national debt. End the 2 wars. Close the foreign bases. Bring the military home to guard our borders. Cut the federal spending to $2 trillion.
Grow our manufacturing sector. If a company builds something in America they should not have to pay corporate taxes on their profit. We should build it here, not buy it from overseas. Companies that invest in new equipment and new plants should be able to immediately deduct it. High paying jobs would be created and tax rolls would increase.
The best social policy is a rock solid, growing economy. If we choose policies that encourage investment and savings we will enjoy prosperity. Instead we have bailed out banks and others who made risky bets and lost. Our government punishes work, savings and investment. It rewards and protects dangerous leveraged financial speculation. Wouldn't it be interesting if the senators and congressmen who voted for the financial bailout plan were voted out of office?
If we punish productivity and continue to enlarge our national debt we will face very hard economic times. Rich people will continue to do fine, but the rest will suffer greatly.
10/23/2008
Actually Maureen, the grammar police are a subsidiary of Liberals since they are trying to eliminate the individual's right to type any damn way he wishes!
From Fairfax, VA, 10/23/2008
Re: the comment by Patrick below. I must be a liberal as I can hardly agree with anything you've written. But I can say that, based on your comment, I guess plumbers don't need to know anything about good grammar (check your use of its and too). Or is good grammar something only liberals are supposed to appreciate?
From Nashville, TN, 10/23/2008
Well, you could think of the Iraq war as a wealth redistribution program, but on reflection that really makes no sense whatsoever. It's a war; the major considerations are things like how many people get killed and whether it actually does any good.
Put another way, a reasonable person might support the Iraq war or alternative energy subsidies *in spite of* the redistributive effects. That is not possible in the case of tax breaks for the middle class, which have no other purpose.
10/22/2008
That is to say "Amen" to Patrick's comment below.
10/22/2008
AMEN!
From Clover, SC, 10/22/2008
Mr. Wilkinson, I heard your commentary on American Public Radio this morning on my way to work (I am a plumber...imagine that). I listen to APR to get my daily dose of liberalism for a good laugh from time to time. I sense some jealousy that you seem to have for "Joe the Plumber". The condescending, snobbish tone in which you presented your commentary on the radio reeked of envy...All you need to do is ask Senator Obama a tough question or two, and you too can be put on center-stage. The problem is that you are among a multitude of bloggers, reporters, correspondants, etc., that drink too much of the liberal flavored Kool-Aid, and do not put forth meaningful questions for Obama to answer. It is hard for someone such as yourself to shine in the lime-light, when you are basically another one of the sheep.
Your spin on economics is mildly amusing, and just another example of extreme Kool-aid exposure. For instance:
Your comment about the Iraqi war. The spending part of it is mostly true. The part about who supported the war/occupation is also true. Except, that you failed to mention that in 2003, McCain was a senator making tough decisions based on information that President Bush, and Congress was given by the CIA. Obama, at the time, was in the early stages of his political career at the "State" level. Therefore Obama was not able to make an "informed" decision on the Iraqi crisis at the time. Really, President Bill Clinton should have attacked Iraq when Saddam's forces were shooting anti-aircraft missiles at our Air Force pilots while patrolling the "No-Fly" zone in northern, and southern Iraq. To put it in terms even a child can understand...If you shoot at my military forces, with your military forces, that is an act of war.
Your comment about the sharing of "state-owned" oil revenues by Alaska to it's residents, is just another example of you putting a liberal spin to fact. Yes, Alaskans do get what is called "royalties". Governor Palin fought hard to get those "royalties" for the Alaskan people because the oil industries was, and still does, make billions from oil profits from their holdings in Alaska. Besides, something that is "state-owned" is owned by the people...
And last, but not least...Your frivolous closing statement makes no sense. How about researching what "plumb" means before you use that word in future ill-concieved blogs. And, besides, I think "Joe the Plumber", is way to busy, and way to smart, to give you a call and immerse himself in the cesspool called liberalism. I, on the other hand, will be more than happy to call you, and discuss political matters with you, even though I know it will be like talking to a week old fish head. You have my e-mail send the number.
10/22/2008
Paying for the use of Alaskan citizens' land is not redistributing wealth. Those companies are not FORCED to pay a premium. That's called CAPITALISM. Go read the history from Clinton's administration leading up to the war in Iraq. It was a justifiable war with the information on hand. That's not the point though. The point is that paying for goods and services to defense contractors is not redistributing wealth. It's capitalism. Changing the definition of "Redistributing Wealth" does not make Obama's tax plan any less of a socialist tenet. Nice try.
From Dayton, OH, 10/22/2008
Will, why is it that you say "5% of Americans provide 60% of our tax revenues" but then don't flesh it out with "then again, they control 60% of the wealth"? I interpret this as a sing of bias, and it must be a tough time for the trickle-down theorists to admit that, again, their theory has failed in the real world. Turns out we need a broad base to ensure robust consumer demand, not an inflated mega-rich class which creates economic bubbles that eventually burst.
From Creve Coeur, MO, 10/22/2008
Haven't we already had wealth redistribution from the working class to the wealthy? Did not our farmer friend in the prior comment enjoy farm subsidies, or wealth redistribution?
From MA, 10/22/2008
So did this wealth re-distribution start when we gave muskets out in Lexington in the 1770's? Calling the modern outsourcing of the defense of our security interests and occupation of Iraq 'wealth re-distribution' is a very long reach. No matter how jaded one is about the defense of the country, we get both basic and exhaustive services in exchange for that expenditure. Democracy is not by definition a 'machine of spreading wealth around'. We just choose to do a lot of it and it's almost always too much for conservatives and almost never enough for liberals. Overall WW isn't necessarily wrong but that example just sounded hollow to me. His closing comments look to be more solid. Thanks.
Jack K.
From Eagletown, OK, 10/22/2008
A different perspective for readers.
My husband and I were born to poverty on a rural Oklahoma farm, literally on a farm. Born ignorant and penniless, we have worked our fingers to the bone for decades to arrive at a position in life of comfortable wealth. We worked our way out of poverty to wealth, worked really hard.
Last fiscal year we paid a fifty-three percent tax rate, a combined personal income tax, capital gains tax and other taxes. More than half of our income is taken away by taxes, not including typical retail taxes. We estimate under an Obama administration, our tax liability will move up ten percent, to about a sixty-three percent tax rate. Under a McCain administration, our total tax rate will be significantly reduced.
High taxes, this annoys us. However, what really angers us is our family, including our daughter, will be carrying the weight of a majority of Americans upon our backs. Bad enough as is, but Obama will make this worse by taking away our hard earned money then giving our money to those who pay no taxes, to those who do not contribute as much to America, to those who do not work as hard as our family.
Obama will render our family a welfare agency, in fact. This is his plan.
Our family response, should Obama be elected, will be to cash out much of our stock market investments, cash out our real estate investments, cash out almost all our investment holdings. We will do this to lower and hopefully eliminate our tax exposure. Millions of other families, I am sure, will do the same. We will withdraw our family money from America.
Obama will prompt many to take actions which will lead to economic disaster for America.
Our family is extremely angry about this prospect of carrying the weight of Americans upon our backs which includes, most likely, you readers.
Our family was born to poverty. We worked our way out of poverty, on our own with no help from any nor our government. None of us have ever collected unemployment benefits, never have received food stamps nor received welfare. We have pride. We work hard. We carry our own weight as all people should.
Where is your pride? Why should our family have to carry your weight upon our backs?
Okpulot Taha
Choctaw Nation
From Ijamsville, MD, 10/22/2008
The anti tax crowd love to talk about the burden of taxes. But they fail to talk about the free spending (BY BOTH PARTIES). We went to war , We cut the tax, we built a missle defense system we cut the tax, and we bought lots of bridges to nowhere, we cut the taxs.
The tax cuts were based on surpluses as far as the eyes could see. Never adjusted lack of surplused. So much for a business plan.
Until we have a responsible way of spending money. We will not beable to hold the polliticians accountable. Yes its fun to spend money. Its no fun to be have to find away to pay. The free lunchers have to put on notice.
10/22/2008
The Cato Institute is listed as a non-partisan entity. Will's article, while interesting, hardly masked the pro-Obama tone. This election is a choice of the lesser of two evils...look at it that way and make your choice.
10/22/2008
Excellent comments Will.
10/22/2008
Ahh, the business of Social Engineering! Control is the universal currency of our time. Have a great day, thanks Will!
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