While the Republicans and Democrats agree that the deficit must be reduced, they have different views about how this is to be done. The more moderate Republicans and Democrats are in favor of modest spending reductions and the illusion that something is being done. The Tea Party folks are pushing for radical cuts, seemingly guided by their interpretation of Ayn Rand. These cuts are aimed at programs and entitlements that help those who are not wealthy. Some of the Democrats, including Obama, have pushed for repealing the Bush era tax cuts for the rich. Naturally, the Republicans are united in their opposition to this plan.
Interestingly enough, the radical cuts of the Tea Party and repealing the Bush era tax cuts for the rich would have approximately the same impact on the deficit. One does this by increasing revenue, the other by reducing spending. As far as defending both the cuts that seem aimed at the less wealthy and keeping the tax cuts for the wealthy, the argument cannot be one of need. Obviously, the less wealthy would certainly seem to need the aid of the state more than the wealthy need the money they would have to pay in taxes. For the poor, going without aid can mean doing without medical care or going into food insecurity. For the rich, being taxed somewhat more might mean that they might have to give up one designer gown that year or go with a slightly less diamond encrusted watch. I exaggerate a bit, but not by much.
One stock defense for keeping the tax cuts is that they will help the economy by creating jobs via spending. The two obvious replies to this claim are that 1) the tax cuts were in place before the recession and seem to have had little impact and 2) the wealthy seem to be having a great year (for the most part) and yet this seems to have had little impact for the rest of us. As such, the idea that keeping the cuts will improve the economy for mainstream America is clearly absurd.
A second line of defense is that the taxes are taking money that belongs to the rich. The most obvious reply to this is that is true of all taxes. As such, if the rich should not have their taxes returned to the pre-cut levels because it is their money, then it should follow that no one should be taxed. While some people do accept this idea, this would effectively entail the failure of the state. This would mean no defense, no police, no fire departments, no road repair and so on. As such, this line of defense easily falls.
A third line of defense is restoring the tax rates would somehow be unfair. On the face of it, this does have some appeal. After all, if the less wealthy Americans kept their cuts while the wealthy Americans lost their cuts, this would treat Americans differently based on their income/wealth. If this is not a relevant difference that would justify the difference in treatment, then it would be clearly unfair for the rich to lose their cuts while the less wealthy retained their’s.
One reply worth considering is that there is a relevant difference in the incomes. To be specific, the rich have so much more that given up a greater percentage of their income/wealth is less of a hardship for them relative to what people actually need. To use an analogy, imagine a water tax. Suppose that a human needs 8 glasses of water a day to survive and imagine that Sally has 100 glasses available per day, Sam has 10 and Wendy has 6. If they are taxed 20%, then Sally is left with 10 times what she needs to survive, Sam will be able to survive (but just barely) and Wendy will die. If Sam’s tax is reduced to 10% and Wendy is given 2 glasses from the tax on Sam and Sally, then Sally does not die and Sam is a bit better off. Sally is, however, vastly better off than either because of her wealth of water-even though she pays a higher percentage of the water tax.
But, someone might say, why should Sally pay a higher percentage even though she is so wealthy? After all, that still seems unfair. Surely lazy Sam and lazy Wendy could go out and get more water (or income). Now, if it were true that Sam and Wendy had less water because they were lazy or otherwise failed themselves, then it would certainly seem unfair for Sally to be “punished” for working harder or otherwise earning her vast amount of water. However, if Sally has her wealth of water because of unfair conditions while Sam and Wendy have less because of those same conditions, then it would seem fair to do at least this small thing to correct these unfair conditions. As such, a seemingly “unfair” tax difference could be justified because it does a little bit to offset a significantly unfair system. The rich do, of course, remain rich and remain beneficiaries of an incredibly unbalanced system. As such, they would seem to have little to complain about.
