The Moral Case for Tax Hikes to Balance the Budget
First, a disclaimer: While I did call this "The Moral Case for Tax Hikes to Balance the Budget", I would much rather have spending cuts. Also, I'm not considering the economic effects of tax hikes, just the morals.
Tax hikes are certainly not a good thing, but look at deficits what they really are: forced tax hikes on future generations who have no say in the matter and and most likely won't be enjoying whatever benefits come from the spending.
Again, tax hikes to pay for extravagant spending are morally horrific. But running deficits to pay for it is even worse.
With deficit spending essentially what people are doing is blowing off huge sums of money and sticking the tab to their kids.
None of this means I am advocating hitting the top 5% or whatever with a 20% tax hike. I'm just saying that the generation who wants the benefits should at least pay for them themselves.
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Aug '10
Re: The Moral Case for Tax Hikes to Balance the Budget
To make a moral case for tax hikes, we must know at least two things (though probably more):
1) Where on the Laffer curve are we (if we're already over the hump, tax hikes lower revenue).
2) Whether we can trust the politicians to actually use the increased revenues (if any) to pay down the deficit, or whether temptation will prove too much for them and they'll end up using the extra money "to pay for extravagant spending [which is] morally horrific".
If we're at risk for either 1 or 2... is there a moral case?
How would you prove we're at risk for neither 1 nor 2?
Oct '10
Re: The Moral Case for Tax Hikes to Balance the Budget
I tend to agree, though I think we should minimize any tax hikes as much as we can. Using the tax code to viscously attack a small minority while raising little revenue, is not acceptable (we can have the equality-of-outcome-versus-opportunity debate, but it must be honest; publicly attacking and shaming a group of Americans for a measly $70 billion a year is nothing more then pandering to the liberal base).
Oct '10
Re: The Moral Case for Tax Hikes to Balance the Budget
Midget, even the Cato Institute doesn't believe we are on the right side of the Laffer curve.
As for whether or not they'd pay down the deficit. . .Washington has presided over too many balance of payments (ah, fiscal + currency) crises in the past thirty years (through the IMF and the World Bank) that I think Congress will act. The spending spree has got to stop, and everyone knows it.
Now, whether our balanced budget will have spending at 20-21% or 24-26% of GDP is an open question; that's where the real battle is.
Aug '10
Re: The Moral Case for Tax Hikes to Balance the Budget
Sorry to be naive, but which side of the curve are you calling the right side?
(I deliberately withheld any opinion as to which side of the curve we're on in order to make my question as general as possible.)
Edited on May 2, 2011 at 7:37pmAug '10
Re: The Moral Case for Tax Hikes to Balance the Budget
Midget Faded Rattlesnake
Sorry to be naive, but which side of the curve are you calling the right side?
Oh, I was thinking of "right" in the context of "right and wrong", but probably you meant "right and left" instead?
Even people who aren't beyond the hump yet have to be aware that there is a hump -- which is why I framed my question in general terms.
Also, it was silly of me to say just "Laffer Curve" when we have more than one form of taxation, wasn't it? Really, it ought to be more like Laffer "Hills", with each distinct form of taxation being another dimension. An opinion piece illustrates a Laffer Hill here; whether the conclusions of the piece are right or wrong, more than one dimension makes sense to me.
Aug '10
Re: The Moral Case for Tax Hikes to Balance the Budget
Here's more interesting stuff on Laffer optimization from economics21.
Laff it up, no?
Sep '10
Re: The Moral Case for Tax Hikes to Balance the Budget
Dan IV: First, a disclaimer: While I did call this "The Moral Case for Tax Hikes to Balance the Budget", I would much rather have spending cuts. Also, I'm not considering the economic effects of tax hikes, just the morals.
... ·
You can't separate the economic effects of tax hikes from the morality of taxation.
I'd rather contemplate the morality of increasing freedom by, among other things, reducing spending, instead of trying to make a moral case for legalized theft.
Oct '10
Re: The Moral Case for Tax Hikes to Balance the Budget
Submitting to the position that the Feral Government of the US remains in it's original Constitutional state is a failure to realize where we are as a people. Forget the future if we make no effort to starve the beast, and instead all stand at the opening to the lair deciding what sacrifices we will make today to stave off the tyrany that is coming our way, and is already in evidence.
Can ANY person who is aware of what that government has become give serious consideration to prolonging it's growth, or even sustaining the present state, and believe that we have more than a few years left to savor our past glory before even those memories come under official attack.
If your children lose their knowledge of a great America, and the Creator to Whom we owe it all, their economic state is a small matter.
Aug '10
Re: The Moral Case for Tax Hikes to Balance the Budget
Midget Faded Rattlesnake:
2) Whether we can trust the politicians to actually use the increased revenues (if any) to pay down the deficit, or whether temptation will prove too much for them and they'll end up using the extra money "to pay for extravagant spending [which is] morally horrific".
I think we know the answer to that one. There is scant evidence that politicians can be trusted with other people's money. Ever.
Aug '10
Re: The Moral Case for Tax Hikes to Balance the Budget
Songwriter
Midget Faded Rattlesnake:
2) Whether we can trust the politicians to actually use the increased revenues (if any) to pay down the deficit, or whether temptation will prove too much for them and they'll end up using the extra money "to pay for extravagant spending [which is] morally horrific".
I think we know the answer to that one. There is scant evidence that politicians can be trusted with other people's money. Ever. · May 3 at 8:09am
My thoughts exactly. Compared to this, Laffer curves, or hills, or whatever, are just a sideshow.
Aug '10
Re: The Moral Case for Tax Hikes to Balance the Budget
There is the real concern, though, about how well "starving the beast" can work... How well has starving the beast really worked in the past?...
Michael LaBeit has the bright idea that the Constitution should be revised (amended, I hope, rather than rewritten -- for a rewrite opens the door to all sorts of mischief) to include quantitative limits on spending. Maybe it should...
Of course, even with quantitative limits in place, numbers (projections, especially) can be massaged to make the beast on paper appear less voracious than it really is...
We've gotten ourselves a pickle, backed into a corner, up against the wall. On a one-way train.
I, too, say, starve the beast. It may be unlikely to work, but I think it's the best hope we have.
Oct '10
Re: The Moral Case for Tax Hikes to Balance the Budget
Midget Faded Rattlesnake
There is the real concern, though, about how well "starving the beast" can work... How well has starving the beast really worked in the past?...
Michael LaBeit has the bright idea that the Constitution should be revised (amended, I hope, rather than rewritten -- for a rewrite opens the door to all sorts of mischief) to include quantitative limits on spending. Maybe it should...
Starving the beast has never worked because we, as a people, have never tried it. Occasional politicians have used the term, Reagan specifically, but until last year, with the advent of the Tea Party, there has never been a constituency for doing it. I believe Michael is right, a Constitutional amendment would be the only real solution, probably citing a specific percent of taxes collected as the limit. Personally, unless e can also get rid of the duplicitous system we currently have, and make taxation transparent and simple, even the amendment will not work.
For me, simple sales tax, not VAT, but a tax collected upon purchase of any taxable item, is the best way of keeping control. (continue)
Oct '10
Re: The Moral Case for Tax Hikes to Balance the Budget
(continued)... With sales taxes we all get to know the size of the bite when it happens. If you only had to deal with that one tax method you would know immediately fed-state-city cost to you. Many states exempt basic living items like food and medications from taxation, and that could really be made to work for the actually poor rather than the "poor" interest.
But, back to starving the beast. We either kill it, or it kills us. The body might survive, but the American Spirit cannot.
Aug '10
Re: The Moral Case for Tax Hikes to Balance the Budget
The biggest problem I have with tax hikes is Midget Faded Rattlesnakes' #2 point above. I don't trust the elected officials to do the right thing with the money. When I was in debt I had to cut back on other expenditures to make the sacrifices to pay off debt. Now that I'm out of debt (relatively speaking) I can use that money for whatever I want. I expect politicians to play by the same rules.
If the Democrats don't think the situation is serious enough to cut spending at a significant amount, it's not serious enough to raise taxes.
As much as I agree that everyone's taxes should be as low as is possible to pay for necessary government spending I'm getting really uncomfortable with the idea that the bottom 47% (or whatever the figure was) don't pay any taxes and receive the vast amount of government benefits. If our current tax system continues there needs to be a minimum threshold if an adult with income wants to receive benefits, even if at just 1-5%. As the popular Ricochet phrase goes: "skin in the game."
Apr '11
Re: The Moral Case for Tax Hikes to Balance the Budget
Dan Holmes
Dan IV: First, a disclaimer: While I did call this "The Moral Case for Tax Hikes to Balance the Budget", I would much rather have spending cuts. Also, I'm not considering the economic effects of tax hikes, just the morals.
... ·
You can't separate the economic effects of tax hikes from the morality of taxation.
I'd rather contemplate the morality of increasing freedom by, among other things, reducing spending, instead of trying to make a moral case for legalized theft.
· May 2 at 11:48pm
I'm simply saying that legalized theft from those who have no decision in it and won't enjoy the benefits is even less moral than doing it to people who at least have representation and may enjoy the benefits.
Aug '10
Re: The Moral Case for Tax Hikes to Balance the Budget
NOT ONE MORE DIME in revenue for the federal government has become my mantra. The deficit is purely a spending problem, not a revenue problem.
There is such immoral waste and extravagance in the federal budget that additional revenue shouldn't even be considered until the following takes place;
I repeat these steps are just the minimum that need to be taken. I guarantee any additional tax revenue will just get spent next time the Dems are in power - they just can't help themselves!
Aug '10
Re: The Moral Case for Tax Hikes to Balance the Budget
What might work is to tie tax increases to spending cuts at a high ratio. In Canada, we balanced the budget by cutting spending and increasing taxes - but we cut $7 in spending for every $1 in tax increases.
There's certainly a moral case for avoiding tax increases, but there's an even bigger moral case for not dumping debt on your children. Politics is the art of the possible: If small tax increases help get big spending cuts, they should be on the table to avoid giving Democrats a wedge issue to demagogue.
The big risk is in repeating the patterns of the past - agreeing to tax increases now, against a promise of spending cuts some time in the future. Then the tax increases take away the fiscal pressure to cut spending, and the cuts never happen. All you get is a tax increase, and ultimately an even bigger government and a bigger debt.
To avoid that, legislation must demand spending cuts to occur in the same fiscal year as tax increases, and they can't be one for one. There must be more cuts than taxes. And make the tax broad-based so everyone feels it.
Edited on May 3, 2011 at 2:27pmApr '11
Re: The Moral Case for Tax Hikes to Balance the Budget
My personal ideal constitution would include a provision absolutely banning deficits at all except fin times of war or a great national emergency like an epidemic which would have to be declared by a huge margin (something like 75%) in both houses of Congress AND a constitutional provision requiring a 80 or 90% majority in Congress to raise taxes.
Perhaps I should have titled it differently; something like "Why Tax Hikes are Less Immoral Than Deficits"
Apr '11
Re: The Moral Case for Tax Hikes to Balance the Budget
And no, I don't trust politicians either.
May '10
Re: The Moral Case for Tax Hikes to Balance the Budget
Steven Potter:
If the Democrats don't think the situation is serious enough to cut spending at a significant amount, it's not serious enough to raise taxes.
Exactly. No further taxation is justified until significant cuts have been made.
Even then, I would reject further taxation because that allows politicians to divert attention from expenses to income. Let them start that game and they'll play it all decade long. The only way to keep both politicians and the public sharply focused on cuts is to exclude the possibility of adjusting income entirely.
Long-term, nothing could be better than eliminating the IRS and replacing the national income tax with a national sales tax. The income tax is a major factor in political malfeasance, allowing endless adjustments and hidden encroachments.
Knowledge is not acceptance. Plenty of politicians and voters alike remain willing to deny reality. Even if there are cuts, we will remain sharply divided about how severe those cuts need to be. People will break themselves to avoid the painful truth.