Yes, make the rich pay!

Here is the budget deal I’d love to see the GOP propose:

Mr. President, you are right that we need to close all those tax loopholes that both parties have been giving rich people for far to long.  No more subsidies.  No more tax credits or waivers.   Tax rates are too high already for everyone, but these giveaways to the rich are a disgrace.  And, why we are at it, let’s cut all government benefits for those greedy rich people.  Why are people who fly to vacations in Vail on the corporate jets eligible for Medicare and Social Security?  Let’s strengthen the social net by making it truly a safety net: something that catches people when they fall, not something that is supposed to lift everyone up to a comfortable living regardless of their effort.  So, let’s start this way: the rich get nuttin’.

I’m not holding my breath.  Whenever the Democrats play the class card, the Republicans just roll over and play dead or repeat the rhetoric that keeping taxes low on corporations and small business owners creates jobs.  Never mind that that rhetoric is actually true.  It’s just such a hard sell.  So, start beating a different drum, one that turns the tables on Democrats by forcing them to justify why we spend such a large chunk of our federal budget on expenses (health care and retirement) that responsible people should be paying for themselves.

How about a GOP that said, “We’ll help the orphans, the widows, the truly poor and destitute, the disabled, the insane.   But, to do so, we need to construct a credible, limited social insurance system in which the great majority of  citizens provide for themselves throughout their lives through hard work,  through saving and sometimes borrowing, and through prudent expenditures.  This will allow us to keep taxes low, to make commerce free once again, and to reign in the size and scope of government.”

Now that would be a party to reckon with.

6 thoughts on “Yes, make the rich pay!

  1. The odd, but interesting, force that’s possibly working against such a turning of tables is the way in which a lot of those programs are currently framed – as a federally mandated savings fund of sorts. Of course, a good deal of us are aware that current payroll taxes are directly redistributed to current program beneficiaries, but that’s not how a lot of people see it. In fact people are so despondent to the idea that these programs constitute some kind of welfare structure that many (particularly on the left) will often claim that programs like Social Security aren’t even government programs at all!

    So while I think the idea is practical (turning these programs into actual means-tested welfare programs) in terms of reducing the scope and cost of such programs most certainly, I think the problems with pushing such a change will be three-fold:

    The first problem, of course, is indicative of the over-all problem in that someone will have to bite the bullet with the way the pay-scheme is already set up. Any change regarding eligibility will probably mean that someone who has paid in a good deal to the program under one pretense will not be compensated. I’m willing to do that, but many aren’t.

    The second problem, more generally, is that Progressives will naturally have a negative reaction to restructuring the “benefit” system in a downward fashion. From our perspective, they shouldn’t. But just looking at the vociferous reactions in regards to talking about giving people more options and flexibility through private investment options with Social Security, it’s not hard to imagine a much more reactionary tone when the scope of such programs is brought up for questioning.

    The third problem is more directly related to what I originally brought up. Many people view these programs, so far as they go, as savings programs. Although many people on the Right (as well as libertarians) are dissatisfied with the system, and often couch these programs in “welfare” language, I’m really not sure how unified they will be in reaction to such a plan – as, from their perspective, you could be turning a program that was bad enough as a “forced savings plan” into just another all-out welfare program altogether.

    To reiterate, while I’d rather see some more radical changes altogether, I think this is a path that’s less bad, on net, and worth discussion. It would certainly put the ball in the Progressives’ court. But there is such varied and complicated perception with regards to many of these programs that it’s legitimately hard for me to predict what the overall reaction might be.

    1. Very nice points. The lefties like to talk about insurance programs to which we all make “contributions”—sort of like the “contributions” that businesses make to the mafia for protection.

      I could tolerate moving towards mandated savings programs, as long as they are actually savings programs, meaning that assets are held by financial institutions who pay returns, rather than the fantasy savings we have today in which government spends all the revenue and writes itself bonds that are only as good as the ability to require future taxpayers to pay for them.

      I think a great failing of the GOP in the health care debates was that the GOP didn’t unite around a reform program based on health savings accounts/loans and catastrophic insurance. Such a scheme would have never made it past the Democratic congress, but it could have changed the terms of the debate for the future.

      In terms of turning the tables, the Democrats paint themselves as the party that helps the poor and working classes. The Republicans need to work hard to re-paint that picture closer to the reality, in which government is running massive, non-market programs that are hugely inefficient and which are building huge future tax obligations.

      1. I can’t disagree with anything you’ve said here. I’m probably much more radical in terms of what I’d really like to see, but as far as far as either proposal you’ve put forth (turning these programs into REAL egalitarian programs or REAL savings programs) I think it represents a marginal move that would land us somewhere far better than where we sit. It’s ironic but probably not a coincidence that, to the extent that these programs are already viewed as savings or social redistribution, we’ve been left with something in between that almost seems to be the worst of both worlds. It’s not too often that I feel like a program that should be naturally entailed by left-leaning doctrines would actually be better than what we have. But I guess that’s how bad things really are.

  2. The problem is the working and middle class incomes have been declining for the last ten years and corporate management and public sector management are doing their best to eliminate defined pension plans and replace them with 401k plans.

    I seriously believe we are entering a new era of social Darwinism.

    Even the late Peter Drucker believed the wage differences between management and the workers were outrageous.

  3. The fact that wealthy people are also eligible for social security and medicare is not the reason why we are bankrupt. All this proposal will do is peel back the last vestiges of the lie that America doesn’t have wealth redistribution, as wealthy people can no longer be duped into believing that the 12% annual social security tax they’re paying is actually funding THEIR retirements. I guess that would be a good thing from the vantage point of those who believe in exposing America’s existing socialism, but not such a great thing for those who believe socialism qua socialism is simply immoral.

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