As the U.S. economy shows sudden weakness, American consumers understandably express increasing anxiety…
CFIF on Twitter CFIF on YouTube
Elizabeth Warren Prepares to Punish the U.S. Economy and Investors with Her Misnamed "Stop Wall Street Looting Act"

As the U.S. economy shows sudden weakness, American consumers understandably express increasing anxiety.  A troubling new Gallup survey reports that economic confidence has now declined to lows unsurpassed since the early days of the Covid pandemic in 2020.

Undeterred by that accumulating weakness and alarm, however, Senator Elizabeth Warren (D - Massachusetts) appears restless to strike yet another dangerous hammer blow by re-introducing her misnamed "Stop Wall Street Looting Act."

She may think that title can conceal the bill's danger, but Americans and elected officials mustn't be fooled or invite the potentially catastrophic economic peril.

Senator Warren’s bill includes significant tax increases, as well as new legal liabilities and bureaucratic regulations on U.S. investment…[more]

October 18, 2021 • 01:48 PM

Liberty Update

CFIFs latest news, commentary and alerts delivered to your inbox.
Sorry, AOC, The Rich Already Pay Their Fair Share Print
By David Harsanyi
Friday, September 17 2021
You don't have to agree with me that (over)taxing the wealthy undermines job creation and growth, or that a tax system that relies so heavily on the fortunes of the few creates more cronyism in Washington and more volatility everywhere else. But the idea that the rich don't pay their 'fair share' is absurd.

Rep. Alexandria Ocasio-Cortez donned an elegant gown with the slogan "Tax the Rich" painted on the back at the Met Gala in New York, where guests selected by Vogue's Anna Wintour ponied up around $35,000 a pop for tickets. The scene was reminiscent of Tom Wolfe's "radical chic"  though rather than being guests of the well-heeled in Park Avenue duplexes, today's revolutionaries own luxury condos and drive around in government-subsidized electric cars that most Americans could never afford.

My first question, though, is: Who doesn't want to "tax the rich"? Judging from my social-media feed, there seems to be a growing segment of people under the impression that the wealthy pay little or nothing in taxes. When you ask Americans if they support a wealth tax, a majority support the idea. One recent poll found that 80% of voters were annoyed that corporations and the wealthy don't pay their "fair share."

Polls rarely ask these people what a "fair share" looks like. Is a quarter of someone's earnings enough? A third? Because the rich have been shouldering an increasingly larger share of the cost of government. The United States already has one of the most progressive tax systems in the free world. Those who make over $207,350 now pay 35% in income tax. Those who make $518,400 or more pay a 37% income-tax rate. At some point, taxation should be considered theft.

Despite perceptions, the highest-income strata of taxpayers are the only ones who pay a larger share of taxes than their share of income. In 2018, the top 1% of income earners made nearly 21% of all income but paid 40% of all federal income taxes. The top 10% earned 48% of the income and paid 71% of all federal income taxes.

On the other hand, in 2021, Americans making less than $75,000 are projected to have, on average, no tax liability after deductions and credits. The average income-tax rate for those making between $75,000 and $100,000 is expected to be 1.8%. More than 61% of Americans  around 107 million households  owed zero federal income taxes for the year 2020.

You don't have to agree with me that (over)taxing the wealthy undermines job creation and growth, or that a tax system that relies so heavily on the fortunes of the few creates more cronyism in Washington and more volatility everywhere else. But the idea that the rich don't pay their "fair share" is absurd.

At this point in the conversation, progressives will set aside their calls for a "wealth tax" and start complaining about capital gains. Here, we simply have a point of disagreement: Ocasio-Cortez would see investment profits in the hands of Bernie Sanders, head of the Senate budget committee. I would rather see them in venture-capital projects and private-equity funds that churn investment dollars and boost technology and jobs. Progressives grouse about accumulation of wealth and then want policies that dissuade risk.

Those who believe what I do will be accused of being "market fundamentalists" or beholden to the wealthy. Progressives  the kind that like to hang out at Met Galas  believe everyone is as class-obsessed as they are. I don't give one wit about the wealthy. In fact, I hope today's entrepreneurs are tomorrow's new rich. We know they will be  without compelled redistribution. How many voters do you think know that nearly 70% of the Forbes 400 richest Americans are self-made? Or that the share of the self-made wealthy had risen from 40% in the 1980s to nearly 70% by the 2010s? How many people who have fallen for the scaremongering worries of "inequality"  another leading reason for the wealth taxation  understand, as economist Mark Perry recently pointed out, that the middle-class isn't "shrinking" because it's getting poorer, but rather because of a long-term trend in upper-middle class growth? Ocasio-Cortez's entire philosophy is a zero-sum fallacy.

No, progressive taxation isn't socialism. But the policy justifications made for tax hikes these days certainly are. Ocasio-Cortez is a fraud, of course, but it's her retrograde economic theorizing that's the real problem. And in this age of populism, increasing numbers of Americans are accepting Marxist conceptions of American life, in which the successful are parasites and everyone else is a victim of their greed.

The reality is that no politician is going to advocate raising middle-class income taxes, despite the ever-increasing cost of government. There is only the rich to tax. Consequently, it's become easier to pass massive expansions of the state. Everyone expects someone else to foot the bill  either future generations or their wealthier neighbors. Meanwhile, taxation has gone from being a means of funding communal needs and projects to a means of technocratic wealth reallocation. This is no way to run a country.


David Harsanyi is a senior writer at National Review and author of "Eurotrash: Why America Must Reject the Failed Ideas of a Dying Continent." 

COPYRIGHT 2021 CREATORS.COM

Quiz Question   
In which century were the first mandatory vaccination laws enacted in the United States?
More Questions
Notable Quote   
 
"At the end of last week, there were 584 container ships idling off the world's ports, waiting to be loaded or unloaded. Disruptions in the bulk cargo sector look to be even worse.Experts suggest the problems are temporary. For instance, Bloomberg columnist Brooke Sutherland maintains that three weeks of declines in ocean freight rates tells us 'the worst may be over for the supply-chain snarls that…[more]
 
 
—Gordon G. Chang, Author of "The Coming Collapse of China"
— Gordon G. Chang, Author of "The Coming Collapse of China"
 
Liberty Poll   

Which is the current greatest day-to-day concern to your family?