Tax Code Distorts Democracy

(Commentary—written by QCTPP member Christopher Sanborn and published recently as a letter-to-the-editor in the Villager Newspapers)

A great weight is put on the American Citizen when he or she goes to the voting booth. Citizens must decide which sides of the issues they stand on—i.e., which government initiatives they favor, and which they do not. Should you support healthcare reform, or should you oppose it? How about welfare programs, subsidized student loans, or auto bailouts? These are intricate issues, and citizens must balance huge quantities of data, opinions, and purported facts when deciding what to support.  But there is one key piece of information that is systematically obscured and hidden from view when it comes to almost any proposed government program, and that is the COST.  And in my opinion, our very own tax code is in large part responsible for this obfuscation.

I have for a long time been a supporter of the Tea Party movement and its call for Fiscal Responsibility at all levels of government. And I, like a lot of Tea Partiers, support the FairTax proposal for tax reform, which seeks to do-away with the IRS and the Income Tax, replacing it with a national sales tax. Recently, I wrote my representative, Congressman Joe Courtney, to let him know of my support for the FairTax.

The response I received from Mr. Courtney was polite, though dismissive of the notion that the FairTax could help our struggling nation. But one particular quote from the reply stood out for me. Mr. Courtney writes that the FairTax, if established, “would decrease the tax burden of high-income earners while increasing it on the middle-class.” Mr. Courtney referred to this as one of the “fundamental problems” with the FairTax.

Now, at first blush, I think most would agree with that statement. Suggestions that taxes be raised on the middle class are almost universally opposed by both the left and the right. But I would like to take a step back for a second and analyze this a bit more deeply.

One of the most lauded features of the “progressive” income tax is the ability to tax different demographics at different rates, with the unsurprising application of taxing higher income-earners at higher rates. In fact, this design feature has been pushed to such an extreme that nowadays nearly half the population gets the entirety of their withholdings refunded to them, paying no net income tax at all.

But what effect does this have at the polling box?

Consider for a moment what happens when—with a tax code so structured that a small minority of taxpayers pays the vast majority of the taxes—a politician proposes a grand-sounding national healthcare plan that purports to solve all of our medical care problems. Well, one of the first things is that a sensible opposition forms and starts to denounce the plan based on its cost. But alas, that message is doomed to fall on deaf ears, because the tax code has been so cleverly crafted as to hide that cost from the majority of taxpayers. Most of the tax burden does not fall on the middle class. It is shifted to business owners and the “wealthy”. Now, who wouldn’t vote for a magic-bullet solution, even an expensive one, when “somebody else” is the one who is expected to pay for it?

The reality is that today’s government is expensive. It costs a LOT of money to provide all of those services and programs. And most of us are blissfully unaware of that cost, due largely to the kinds of cost-shifting permitted by a progressive income tax. Indeed, if ordinary, middle-class citizens were actually asked to “pay their share”, do you still think the vast majority of Americans would support such a big and bloated government as we have today?  I suspect the answer is “No”.

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1 Response to Tax Code Distorts Democracy

  1. ctduffy says:

    Reblogged this on ctserf.

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