{"id":17213,"date":"2017-06-30T21:01:12","date_gmt":"2017-07-01T01:01:12","guid":{"rendered":"http:\/\/www.megalextoria.com\/wordpress\/?p=17213"},"modified":"2017-06-30T21:01:12","modified_gmt":"2017-07-01T01:01:12","slug":"you-cant-end-poverty-without-cutting-taxes","status":"publish","type":"post","link":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/2017\/06\/30\/you-cant-end-poverty-without-cutting-taxes\/","title":{"rendered":"You Can’t End Poverty without Cutting Taxes"},"content":{"rendered":"

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You Can’t End Poverty without Cutting Taxes<\/h2>\n

Recent tax proposals have let loose the dogs of economic war. While debate has raged over the impact of tax cuts on growth and revenue, the moral case for low taxation remains largely neglected.<\/span><\/p>\n

Critics have predictably launched an all-out assault on the idea that taxpayers should keep more of their own money. One op-ed <\/span>bemoans<\/span><\/a> the \u201c<\/span>alchemistic belief that huge tax cuts can pay for themselves by unleashing faster economic growth.\u201d Another <\/span>decries<\/span><\/a> the alleged lack of financing to \u201cpay\u201d for tax cuts, while further deriding them as mere \u201cbenefits for the wealthy.\u201d Others have abandoned evidence entirely and resorted to personal attack. \u201cWhen power meets greed, you can bet, the schmucks in the red hats will pay,\u201d <\/span>snarks<\/span><\/a> one such commentator.<\/span><\/p>\n

Tax reform advocates have rightly refuted these tired and often evidence-free attacks. For instance, <\/span>hard facts demolish<\/span><\/a> the farce that tax cuts uniquely benefit the rich. In percentage terms, tax reductions have historically tilted toward lower earners. As Thomas Sowell has pointed out, the slogan \u201ctax cuts for the rich\u201d should be labeled \u201ctax lies for the gullible.\u201d Furthermore, talk of tax cuts \u201cpaying for themselves\u201d is disingenuous. <\/span><\/p>\n

A lower tax rate may mean lower revenue, but less revenue is not the equivalent of government expenditure. Government spending must be \u201cpaid for,\u201d but taking less of a worker\u2019s income \u201ccosts\u201d nothing, as the income earner\u2014not Uncle Sam\u2014has the right to the fruit of his labor. To argue otherwise means income first belongs to the state, not the individual. Remarkable that a country whose founding creed was \u201cno taxation without representation\u201d would lose sight of such an elementary truth.<\/span><\/p>\n

Moreover, whether lower taxes translate to higher revenue depends on the tax cut in question, but what is clear is that heaps of evidence\u2014including a study by former Obama administration economist Christina Romer\u2014show that <\/span>lower taxes boost economic growth.<\/span><\/p>\n

The Case for Lower Taxes<\/strong><\/p>\n

Important as these matters are, however, the case for reduced taxation is also compelled by moral considerations. <\/span><\/p>\n

Every generation of Americans has understood that taxation is a fact of life. Ben Franklin famously remarked that in life \u201cnothing can be said to be certain, except death and taxes.\u201d However, our founders worked to keep taxes limited and uniform. <\/span>\u201c[A]ll duties, imposts and excises shall be<\/span> uniform<\/span> throughout the United States,\u201d reads the U.S. Constitution. [emphasis added] That <\/span>is why they not only rejected <\/span>progressive<\/span> income taxation, but income taxation entirely. The early republic instead applied taxes primarily to goods, which provided maximum personal choice (to avoid the tax one could avoid purchasing the product).<\/span><\/p>\n

This vision generally held until the early 20<\/span>th<\/span> century, although there were two brief experiments with an income tax prior to that period. The first involved income taxation as high as ten percent during the civil war, which was repealed shortly thereafter. <\/span><\/p>\n

The second was in 1894 when Congress passed an income tax that applied to the top two percent of wealth holders. However, it was quickly struck down by the Supreme Court as unconstitutional. As historian Burt Folsom notes, \u201cAt age 77, [Stephen] Field,\u201d who was a Supreme Court justice at the time, \u201cnot only repudiated Congress\u2019s actions, he also penned a prophecy. A small progressive tax, he predicted,\u00a0\u2018will be but the stepping stone to others, larger and more sweeping, till our political contests will become a war of the poor against the rich.\u2019\u201d<\/span><\/p>\n

That prophecy became reality in 1913, when a constitutional amendment cleared the way for progressive income taxation. Beginning at a modest 7 percent, the top rate didn\u2019t remain there for long. It quickly rose to 24 percent, before jumping to 63 percent under Herbert Hoover. It reached 90 percent under FDR, who proposed raising it to a breathtaking 99.5 percent in 1941. Thankfully, his proposal was rejected and the top rate declined in subsequent decades. Today it stands at 39.6 percent.<\/span><\/p>\n

But there are at least three moral reasons for lower taxation. <\/span><\/p>\n

The Morality of Tax Cuts<\/strong><\/p>\n

First, <\/span>bigger government means less individual generosity<\/span>. The more of our money government consumes, the less we give to private charities and local community members in need<\/span>. Jonathan Gruber, an economist from MIT,\u00a0<\/span>conducted a study<\/span><\/a>\u00a0of the New Deal government in the 1930s, and concluded that private charity spending \u201cfell by 30% in response to the New Deal, and that government relief spending can explain virtually all of the decline in charitable church activity observed between 1933 and 1939.\u201d Another <\/span>study<\/span><\/a> of charitable giving from 1965 to 2005 \u201c<\/span>showed that increases in state and local government welfare and education spending do reduce charitable giving.\u201d <\/span><\/p>\n

Second, <\/span>benevolence with other people\u2019s money is no virtue.<\/span> A<\/span>dvocating higher taxes on others to pay for government programs may make us feel good, but <\/span>virtue requires self-sacrifice and personal generosity.<\/span> Relying on the state gives us the luxury of feeling good about ourselves without having to do good.<\/span><\/p>\n

Third, government aid is often less effective at lifting the destitute. P<\/span>rivate charities make distinctions between people who truly need help and those who do not, as well as between those who need material assistance and those who need moral refocus, personal counseling, relationship repair or spiritual commitment. Government, no matter how well-intentioned, does not and cannot make such distinctions. <\/span><\/p>\n

The State Perpetuates Poverty<\/strong><\/p>\n

In his ground-breaking book, <\/span>Losing Ground<\/span>, Charles Murray documents poverty steadily declining through the 1940s, 50s and 60s, before government\u2019s \u201cWar on Poverty.\u201d Afterward, however, the trend reversed. According to government\u2019s own figures, the poverty rate has failed to drop after 50 years and $22 trillion in anti-poverty spending. <\/span><\/p>\n

As social scientist Marvin Olasky notes, the failure is attributable to government\u2019s emphasis on \u201centitlement rather than need.\u201d <\/span>As the state swelled, even <\/span>\u201csmall efforts at categorization and discernment were seen as plots to blame the poor rather than the socioeconomic system that trapped them,\u201d Olasky notes. \u201c\u2018Freedom\u2019 came to mean governmental support rather than the opportunity to work and move up the employment ladder.\u201d<\/span><\/p>\n

Our founders would be unsurprised. Reflecting on poverty, Ben Franklin remarked:<\/span><\/p>\n

\u201cI am for doing good to the poor, but\u2026I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. In my youth I traveled much, and I observed in different countries, that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.\u201d<\/span><\/blockquote>\n

There is no compassion in keeping the downtrodden impoverished, nor is it good for the economy. These realizations led Milton Friedman to proudly proclaim: \u201c<\/span>I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible.\u201d Reasons abound and the possibility exists. We simply need to make the case. \u00a0<\/span><\/p>\n


\nDavid Weinberger
\n<\/a><\/p>\n

David Weinberger formerly worked for The Heritage Foundation. He currently blogs at <\/span>diversityofideas.blogspot.com<\/span><\/a>.<\/span><\/p>\n

This article was originally published on FEE.org. Read the original article<\/a>.<\/p>\n

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