The past few years has brought about a consistent theme in American politics, which is that Democrats want to increase the taxes on the “rich” (though sometimes their definition of rich tends to include the middle class) while the Republicans are against any and all tax hikes, but have no problem taking away benefits from the working poor. At least, all of this is the stereotype of both parties, but it’s easy to see that GE – a major Democratic contributor – paid no taxes last year while the Republicans called for a close in the tax loopholes, which in effect is an increase of taxes on corporations. But this is all beside the point.
Recently President Obama has floated around the idea of increasing taxes on the top income earners in America, of those who have a seven-figure income. All of this would be done in order to somehow save some government programs. The Republicans, as per usual, are against the tax hike because they arguing that by raising taxes on the wealthiest of Americans – the job creators – we would see a stagnation in our economy because the rich would simply refuse to create more jobs.
The thinking is quite simple:
Ed (or Edward Mortimer IV in our example) owns a multi-million dollar corporation and brings in a seven-figure income. He currently pays around 35%, but because of his income he has found a great accountant and can get away with only paying around 20% of his income. If we close the tax loopholes then he’s stuck to paying 35%. Then we raise the tax up to 38%. Let us assume that before taxes he brings home exactly one million dollars. Before the tax increase (without loopholes) he would bring home $650,000, which isn’t bad at all considering the median income for Americans. After the tax-hike, he would bring home $620,000, losing $30,000 in a year (which is more than 1 in 4 Americans make in a year). We’re told that Ed would cut jobs or stop hiring people over a loss of $30,000 a year.
In other words, the Republicans are saying that our richest elite are actually holding us hostage. They’re saying, “You’ll let me bring home x amount of dollars or else I’ll cut jobs or produce my goods overseas!” All over $30,000, which is less than a luxury vehicle.
Now, certainly there comes a point where a tax percentage is oppressive – I would argue that regardless of circumstances, taking half of what a person has legitimately earned just seems wrong; that the person works for a living and doesn’t get to bring home even half of his income just doesn’t seem right. At the same time, however, increasing the tax rate a little bit shouldn’t discourage business growth, it should encourage it; if a smart businessman loses $30,000 in income due to taxation, he will work hard enough to increase his business in order to make up for that loss. In other words, smart businessmen and women will create jobs during a personal income tax hike rather than cut jobs, all so they can make up the lost revenue.
Of course, others will unwisely cut jobs (which in the end hurts the economy because it ruins the spending power of individual Americans; the goal in business should be to pay your employees as much as you possibly can while still making a profit, all so the spending power of your employees increases, which in turn will increase your business). Thus, we bow down to those who say they would cut jobs and refuse to increase their taxes, yet our government continues to go into debt.
But of course, on the Democratic side of the equation we have an absolute refusal to cut spending on certain projects. While the projects might be nice, even with a tax hike we can’t afford all of these projects. Thus, we have to cut spending, lest we create a scenario where more and more people have to go on government assistance. The goal of the government shouldn’t be to increase food stamps, welfare, and so on; it should be to cut the spending in these areas because they aren’t needed. In other words, it’s okay to cut the programs in one area so long as there is an alternative set up to help people become self-sustaining without those programs.
Yet, because of greed, no change is found. Because of the greed of the Democrats and their lust for power, they simply want to increase welfare programs without drastically reforming welfare, all because it could potentially cost them votes; the Democrats just want to spend, spend, and spend some more. Because of the greed of the Republicans and their lust for power, they simply want to cut much needed government programs without finding a way to reform them so the poor don’t suffer, all the while cutting the taxes for the rich. All the while, the poor and middle class suffer.
In the end, what we have is a government that is run by professional politicians who seek to stay in power; the government is not run by those who are interested in the public good. We can play the partisan role by blaming primarily the Republicans or primarily the Democrats, but the reality is that both parties are horrible and both parties share an equal part of the blame. Both parties have career (or those who desire to be career) politicians. Both parties have lost an interest in doing what is right and just and instead are only interested in what’s good for the Party and what’s good for themselves. We have a government that’s merely interested in what’s good for the individual or collection of individuals, but couldn’t care less about the Good.
In fact, the great philosopher – the last Roman philosopher – Boethius once wrote,
“By his [Plato’s] mouth likewise thou [Philosophy] didst point out this imperative reason why philosophers should enter public life, to wit, lest, if the reins of government be left to unprincipled and profligate citizens, trouble and destruction should come upon the good.” (Consolation of Philosophy Book IV)
While Plato may have been too much of an elitist for today’s sensibilities, Boethius does well to bring up Plato’s point about the importance of having thinkers run the government. A true thinker isn’t one who finds cheap ways to win an election and stay in power, rather it is someone who is so overly concerned with what is good and right that he will pursue the good even if it costs him a position of authority. The ideal “politician” would be one who runs on certain principles, even if those principles are unpopular; one who sticks to those principles, even if his own party turns against him; one who enacts those principles, even if he costs him his position. Of course, all of this is only true if his principles align with what is good, and not just good for the Party or for him, but what is Good.
Such a person would look at the modern political landscape and our debate over the economy. He would ask why we can’t reform government programs to encourage people to become self-sustaining, thus helping the poor while also cutting spending. He would ask why we can’t raise the taxes slightly on the richest of our population and punish them if they threaten to hold us hostage (by issuing a tax penalty or some way to compensate employees who are laid off due to one person’s greed). Ultimately, he would ask why we value and survive off a vice – greed – rather than pursuing what is virtuous, such as prudence. He would ask why we continue to elect people who are greedy and lustful for power, rather than electing those who are only interested in the public good and not what they can personally gain.
Sadly, such a politician would never get elected in our nation. Thus, I am convinced that we will continue to bicker and fight over minor issues while the major issues go unsolved. The gap between rich and poor will continue to grow. The divide between Republicans and Democrats will widen. The solutions will be there, but no one will have the courage to enact those solutions.
Yet, in many ways we’ve placed ourselves in this situation. While we can complain about how our government acts and how there are no people of courage in the government, we created an environment that allowed for such a government and continue to perpetuate such an environment. In fact, the more we fester this unhealthy (im)moral environment, the worse our government will become. That is what we will explore in Part 2 of this post.