This is my question for the Presidential candidates in the upcoming debate. I tried to submit it through the forum they’ve established for that purpose on the internet, but discovered that they had imposed a 255 character limit on the questions you could pose. I trimmed this to fit their format and sent it on, but the process eliminated all the background and nuance that makes the question seem relevant (try it for yourself and see how it comes out). Without the lead-up, the question itself could easily be taken as a mere self-indulgent tantrum by some spoiled and greedy brat who just doesn’t like paying taxes — which is, I’m sure, how most of the media and a great deal of the electorate would choose to take it.
Since the moderator for the debate in which they are soliciting questions is Tom Brokaw, I also sent this through a back door — to the producers of Meet the Press, which Mr. Brokaw is now hosting — in hopes that the full question with all its subtlety might come to his attention.
If I had to bet, I would guess that neither this question nor any variant of it will be asked of either candidate between now and election day.
29 September 2008
Having gone through what detail there is on Barack Obama’s web-site about his plans for future tax rates, and having matched those to current tax tables to extrapolate the future effect, it appears that, after all the increments in marginal rates and surcharges on Social Security and everything else, the effective federal tax rate for “the rich” — I’ve adopted his target of $250,000 as the cutoff for that category — would be on the order of 1/3 to 1/2 of their income. If we consider the effect of state and local taxes — income taxes in most states (a marginal rate of almost 10%, for instance, in California) and/or property taxes (a somewhat lesser but still large burden in New Hampshire which has no income tax) and sales and excise taxes on various items that can easily add up to another few percent — the total effective tax burden for those “rich” people who derive a significant fraction of their income from wages, rather than from capital gains, would probably be more in the range of 45% to 60%, which seems, to my mind, to be straying beyond the boundaries of high and into the realms of excessive.
And yet, by historical standards, the marginal rates in the Obama plan are still relatively low — a reflection of our recent political history — and there are many within the Democratic party who openly advocate for a return to those earlier and more “progressive” times. Joe Biden, while not putting any numbers to it, has been on the stump arguing that “the rich” should be paying their “fair share” — meaning much more than they currently are — as a matter of patriotic duty to help out with the current fiscal crises.
One of the great fears, therefore, of those whose incomes make them “rich” by the Obama standard is that a Democratic legislature with a sympathetic Democratic president would remove all restraint on the urge to raise extra revenue for the various projects and programs they’ve promised to their insatiable constituencies by “soaking the rich”. What they fear is a slow but inexorable journey back to 60% or 70% or 80% or even 90% tax rates in the name of “paying their fair share”.
The question, then, for both Presidential candidates is: What do you think is a “fair” tax rate? What is a “fair share” for any individual citizen, whether or not they are “rich”?
And, even more importantly, On what basis do you make that determination?
Is there some moral or philosophical principle that guides you when you assert society’s claim on the recompense an individual receives for his or her productive labor? Is there some standard by which you determine that a particular proposed increment in or level of taxation is or is not too much? Is there some protection you can guarantee citizens, some level short of 100%, above which you can promise, a priori and as a matter of principle, never to go?
Or is the citizen’s “fair share” strictly a matter of political power, of how much you can get away with extracting before inciting a backlash — is our protection against a tyranny of the majority in this particular governmental function merely pragmatic rather than principled?
UPDATE, 8 October 2008: Debate happened. No questions about what a “fair share” is nor about how it is determined.
UPDATE, 7 November 2008: Election happened. No questions about what a “fair share” is nor about how it is determined.
(C) Copyright 2008, Augustus P. Lowell