Monday, April 25, 2005

Un-Taxing the Rich

Nick Woomer of the Minnesota Daily (the University of Minnesota student newspaper) writes:

Freedom for the vast majority of us means that we should all be entitled to live at a certain level of comfort in spite of how the economy is doing: We should be guaranteed access to health care, to decent unemployment compensation, to be able to retire at a certain age and to have a say in our workplaces.
Typical fare. Freedom means to be provided with a laundry list of nice things regardless of one’s individual choices--with a clear implication: those who choose wisely have a moral obligation to provide for those who don’t.

But just how is Woomer’s gift to the "vast majority" to be met by the un-vast minority? Recent legislation proposed by the state of Connecticut offers a hint. There, the Connecticut General Assembly's Joint Finance, Revenue and Bonding Committee has passed SB 1321, a bill which would raise the existing 5 percent state income tax rate for high-income residents to as much as 6.75 percent for those individuals earning more than $1 million a year. Dubbed the "millionaire tax," SB 1321 targets the wealthiest of Connecticut’s residents at a time when Connecticut is enjoying a $417.8 million dollar surplus in state tax revenue.

Not surprisingly, the legislation enjoys broad support.

Those polled were asked whether they favor or oppose four different tax increase proposals. Three-quarters (75%) of residents say they support an increase from 5% to 6% in the income tax rate on single filers who make over $500,000, and 81% support the same tax rate hike on the income of joint filers making over $1,000,000. [University of Connecticut]
Or more honestly, three-quarters of Connecticut residents say they support increasing taxes on people other then themselves.

I'm not too worried about Connecticut's wealthy; many of them will simply switch to tax jurisdictions that don’t penalize wealth. But in a larger sense, what is one to do? Obviously, this is a moral fight that needs to be fought on moral terms. Yet one can easily target the forces that seek to punish achievement with a simple political reform that would reap tremendous benefit. Where our opponents seek to make state taxes more progressive, we should seek to make state taxes flatter.

Why do I think we should make moral augments and expect political change as a result? Because somewhere in the history of Objectivism’s rise, pioneers are going to translate Objectivist ideas into concrete political action. If it were up to me, the sooner this is achieved, the better.

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