Warren Buffet helped to kick off the recent income inequality hullabaloo by asking loudly why he wasn’t being taxed more. This provoked the glib (but somewhat sensible) response, “If you want to give more money to the government, no one is stopping you.”
In an interesting recent article (click here to read it), Economist Bryan Caplan says this response is a red herring, since Buffet’s individual action won’t solve the problem as he perceives it. To Buffet, all similarly-rich people should be paying higher taxes. His contribution isn’t enough.
But a recent salty oped by Stephen King gets at the heart of the matter (click here to read it). Voicing concerns similar to those of Buffet, King insists that the rich should be taxed more because it’s more proportional, more fair.
I wonder, what exactly would King consider fair? 100% after a certain income level? He protests that the rich have benefitted from living and working in the United States, and thus they owe the U.S. a kind of debt of gratitude. But he doesn’t comment on the benefit the rich have already given the United States by the very actions that made most of them wealthy. They have provided products and jobs. The American citizenry have benefitted from this, and our various levels of government have taxed both these earnings and sales.
These protestations need more substance. What exactly is “fair”?
How about a per person head tax? What about a flat percentage tax? Surely an even percentage seems the most “proportional” of all: You earn more, you pay more.
I doubt this method would appease either commentator. It seems that “fair” is in the eye of the beholder. Perhaps their ideal is that the top X% of the rich should be taxed until all our nation’s bills are paid and programs funded. The trouble is, there’s only so much juice you can squeeze from those oranges – at what percentage do the rich feel too much pressure? At what percentage do people simply cease I care about climbing the socio-economic ladder? King doesn’t answer this question.
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