I discovered the following Daily Caller video courtesy of American Elephants. The video highlights wealthy Democrats who are advocating for the top 1% in income to pay their “fair share.”
When the Daily Caller reporter in this video provides these liberals with an opportunity to pay their “fair share” by making an on-the-spot donation to the U.S. Treasury Department, not one liberal advocate is willing to put their money where their mouth is.
Not one.
I am actually baffled by this hypocrisy, and I frankly cannot understand it.
So, in all seriousness, can any self-described liberal who follows this blog please describe why someone advocating for higher taxes would not voluntarily pay more of them when presented with the opportunity?
In all honesty, I am looking for the best argument someone can muster for this behavior because I simply cannot understand it.
Reflections of a Rational Republican 
Awesome video. Thank you for sharing.
Glad to help. I’m just amazed I hadn’t discovered your blog yet when Moe and Vern were there a year or so ago.
Obviously it’s not fair if they don’t force everyone to do the same thing.
Chris!
Happy Holidays! Random question: Is Between Books still thriving?
Thriving? No.
Surviving? Yes.
Though it’s a close-run thing at times.
Well, it’s good to hear it is still in business. I will try to stop by the next time I in Delaware — which is unfortunately not that often — and support this magnificent locally-owned business that carries so many positive memories for me.
Could it be that they are uncomfortable with the procedure taken by the reporter? One of them made some sense in that the issue should not be treated as one would a charity, since there is a difference between that and enacting laws that apply to all. I know that I would be rather uncomfortable if a reporter seemed coercive in front of a camera (as if to seek to embarrass me). That’s my sense, without meaning to defend those people who were interviewed.
Personally, if I were at an event advocating that I should pay more in taxes, I would certainly be prepared for a stunt like this. I think the only guy who remotely comported himself well was the one who said he already paid his fair share since he under-withheld his taxes. Nevertheless, even that excuse was weak.
Most of the arguments seem to fall around the excuse that they won’t pay unless everyone else is forced to pay. But I still struggle with this argument. If one personally believes in something, why not live by one’s principles? The standing argument basically boils down to: I can only live by my principles if I force everyone else to live by them.
It is simply baffling to me. There are plenty of highly intelligent liberals out there who surely have a better argument than this. I just wish they would share this logic with conservatives, because I don’t get it.
So, in all seriousness, can any self-described liberal who follows this blog please describe why someone advocating for higher taxes would not voluntarily pay more of them when presented with the opportunity?
You miss the premise. They are not advocating higher taxes on themselves. They are advocating higher taxes on other people. It is simply a continuation of the liberal desire to force other people into contributing to the liberal version of charity.
Perhaps. I think Scott’s come the closest to explaining it. In the end, there seems to be some sort of cognitive dissonance between the game theoretic argument and the argument from how it looks and plays politically, in my opinion.
I think the top earners should be paying a fair share in federal taxes (the top 400 earners pay about half the collective federal taxe rate as compared to those earning $100k/yr).
I’d prefer the rules of the game be changed so that the collective federal taxes were flat (they are currently progressive for the population of incomes $100k).
As it is, the US middle class appears to be in decline. If we end up as a society of have’s and have nots we weil all be worse off due to the increased political and social instabilities, not to mention the continued economic decline that will accompany the demise of the American consumer.
However, I’m a rational and conservative person. As the middle class declines, I intend to do everything I can to ensure I remain above the middle. Toward this end, I have no interest in paying more in taxes than the law requires.
Thus, for me the argument isn’t about faithfully adhering to ideological principles but about effective governance. Specifically; What tax and government policies are most effective in growing the US economy?
“I think the top earners should be paying a fair share in federal taxes (the top 400 earners pay about half the collective federal taxe rate as compared to those earning $100k/yr).”
Ben, thanks for stopping by. I think the reason you have effective tax rates like this is a natural consequence of the Laffer Curve – i.e., if the government demands more taxes, it will get more tax revenue to a certain point after which tax revenue will decline the higher the rate goes. I personally don’t think marginal tax rates are the problem, though I do agree that reforming the tax code is the most efficient and fair way to address the problem you are highlighting. The problem as I see it, though is that Congress is not focused on these loopholes per se, but is more focused on raising marginal rates. The obvious response for the wealthy will just be to more aggressively exploit these loopholes.
“As it is, the US middle class appears to be in decline. If we end up as a society of have’s and have nots we weil all be worse off due to the increased political and social instabilities, not to mention the continued economic decline that will accompany the demise of the American consumer.”
I completely agree. I high Gini coefficient is not a good thing.
“Thus, for me the argument isn’t about faithfully adhering to ideological principles but about effective governance. Specifically; What tax and government policies are most effective in growing the US economy?”
Again, I completely agree. I’d add that the way to do this is by growing the economy rather than redistributing income in a staid one. The Soviets taught us long ago that such systems simply don’t work in the long run, and the elite ultimately becomes even more powerful and wealthy at the expense of the rest. Because when wealth is generated by bureacratic fiat, it becomes more arbitrary and less meritocratic over time.
Thanks for the response.
Regarding the laffer curve, I agree that such a phenomena exists. However, I think the reality is too esoteric to lend itself to analysis in this sort of communication. Warren Buffet mentioned earlier in the year, that if capital gains taxes on stock equities were raised, he’d continue to invest in stocks because it would remain his most attractive opportunity. There are obvious limits to such a claim. I’ve love to see a good analyses of that subject.
Even so, I do think there are situations where tax changes can produce significant changes in behavior. A good one, (I think) is how corporations respond to increases in taxes (payroll and/or income taxes). In the global environment corporations tend to favor doing in business environments which allow them to maximize their profits. Taxes (the Laffer curve) plays an important part in that.
The largest reason (imo) corporations differ from individuals is because individuals can’t be multinational and declare that income made in China is taxes by China and not the US, and/or vice-versa. Hence I think the behavior of individuals is less elastic than the behavior of corporations.
I’m skeptical of the comparison to the Soviets. Our system of social programs is quite different that Soviet style communism to make meaningful comparisons, isn’t it?
I tend to favor the idea that there should be sufficient social programs to maximise the middle class income level. And I also tend to ignore the burdens placed on those at the low and/or high extreme levels. On the low end I acknowledge there are dead-beats, but don’t expect the direct costs of a “safety net” is much more than the indirect costs of doing nothing. On the high end, short of giving up citizenship, individuals have no real option than to pay taxes at what ever the prevailing rate may be.
“The largest reason (imo) corporations differ from individuals is because individuals can’t be multinational and declare that income made in China is taxes by China and not the US, and/or vice-versa. Hence I think the behavior of individuals is less elastic than the behavior of corporations.”
For most of us, this is largely true, I think. For the very wealthy, there are quite a few tax advantages one can derive from playing different domiciles against one another and using different tax shelters.
“I’m skeptical of the comparison to the Soviets. Our system of social programs is quite different that Soviet style communism to make meaningful comparisons, isn’t it?”
Sorry, I didn’t mean to imply that the United States is turning into the Soviet Union. We are very far from that. All I wanted to say is that the Soviets took property redistribution to its extreme, and it resulted in decades of misery for millions of people.
I think there are many smart ways to solve the problem of inequality, I just think that finding ways to stimulate the economy are prefereble that simply just redistributing income.
“On the high end, short of giving up citizenship, individuals have no real option than to pay taxes at what ever the prevailing rate may be.”
They could take full advantage of deductions to push their income to a lower marginal tax rate, though. And many of them do. It’s perfectly legal and if you have a fancy lawyer and/or accountant who can maximize international tax arbitrage to make your income look as small as possible.
It would be stupid to pay in when others are not. That doesn’t solve the problem, it doesn’t address inequities, and treats people willing to pay unfairly. The only way to address the real problem is to make everyone play by the same rules. Let’s say you’re the owner of a football team. You advocate that quarterback protection should be increased by some new rule. The league rejects it. Do you tell your team to play by the rejected rule because you support it?
Scott.
Thank you for providing some rationale for this behavior. I agree with you from the standpoint of a Game Theoretical perspective. This is a classic Prisoner’s Dilemma of the Left’s Devising — that is they are both jailer and prisoner. Right now, wealthy liberals are playing the optimal strategy of defecting (as are wealthy conservatives). The problem as I see it, is that these wealthy lefties are trying to break the prisoner’s dilemma stalemate by changing the game so that there is no longer any option to defect. This is neither right nor wrong; it is only a strategy. The problem is that the amounts of loss are not fixed in this game, as they are in a standard prisoner’s dilemma. People can actually reduce the scope of the problem by increasing their tax payments even marginally. It won’t solve the problem, certainly, but it will make it less worse.
That said, I will never understand the inequality argument. It all depends on one’s definition of inequality. Your definition is that the incomes of the wealthiest 1% have risen disproporationately relative to the rest of America, which is indisputably true. My definition focuses on who is actually paying what percentage of the taxes. When 1% of the population pays 40% of income taxes, I believe people are already paying more than their “fair share.” Additionally, the more a government relies on an increasingly smaller minority of the population to pay taxes, the more unstable its tax revenue becomes – California’s volatile tax revenue is a prime example of this notion. While I still agree that we have an income inequality problem in the United States, I prefer solutions that grow the underlying economy, rather than solutions focusing on redistributive tax policies. If the economy grows, everyone wins. Redistribution merely generates nothing, but rancor and hatred, and does not address the root causes of inequality — lack of education, unstable households, unions that make American labor uncompetitive, one of the highest corporate tax rates in the world, etc.
While I like your analogy, I don’t think it is a direct analogue to the situation here. The example presumes that by taking action on one’s own, it will do nothing to improve the situation because it can only be fixed with a rule. Instead, league teams could achieve marginally better quarterback protection by assigning more linemen to protect the quarterback (i.e., switch wide receivers to tight ends, etc.).
Here’s how I think about the situation. Let’s say I believe crime is high in my area. I also believe we don’t have enough police protection. I have two options: 1) I could vote to pay more taxes for greater police protection and thereby force my neighbors who may not agree that more police protection is needed to solve the root cause of the problem, to pay for what I want, or 2) I could start a neighborhood watch program with like-minded citizens, while others benefited from this protection without having to pay for it. If I truly believe that more protection would mitigate the problem, even marginally, and firmly believed in my principles, I would implement option #2, because it would at least marginally improve the situation, and happen much faster than option #1. I very well could then still pursue option #1 using the advantage of the moral high ground I’d established by implementing option #2.
The bottom line is that I understand the cold, rational game theoretic argument, but the political argument makes these folks look really hypocritical – i.e., they’ve given up an opportunity to win the moral high ground and turn it into their advantage. They essentially won’t put their money where their mouth is. What I object to is that they refuse to demonstrate their principles unless they can force others who disagree with them to abide by these same principles.
Anyway, I appreciate your help in helping me understand the drivers and rationale for this behavior.
Let’s say you’re the owner of a football team. You advocate that quarterback protection should be increased by some new rule. The league rejects it. Do you tell your team to play by the rejected rule because you support it?
Well, in this case there is a direct “winner and loser.” It’s a zero sum game; as the Patriots gain get a 7 point advantage, the Vikings suffer a 7 point disadvantage. This isn’t that. We are not playing a game where a winner is determined by wealth. As I understand it, the liberal position is that by changing the tax rules, more money is put into the system. In this case, if the rich liberal were to put his “fair share” into the kitty, the goal would be achieved, more money would be put into the system. And the rich liberal would be no worse off than he would be if EVERYone had to pay more.
The analogy is more similar to this:
I would like to force everyone to be more polite; to say please and thank you. When that rule is rejected, I should still want to abide by my personal life choice. I neither win nor lose by saying or not saying “please and thank you”, but the world becomes “a better place.”
This rejection to pay more has at its roots the desire of people, liberals and conservative are both guilty, of trying to legislate other people into living according to their version of a good life.