Wednesday, February 29, 2012

The privilege of being American

Lawrence Lindsey has an excellent column refuting what Tim Geithner recently said to defend raising taxes on the rich. Geithner said that the "most fortunate Americans" should pay higher taxes in return for the "privilege of being an American." There is something deeply disturbing about this attitude towards other Americans and Lindsey lays it out.
Philosophically, the concept that being an American is a "privilege" upends the whole basis on which America was founded. Privileges are things granted to one individual by another, higher-ranking, individual. For example, in my house my children's use of the family car is a privilege. One presumes Mr. Geithner believes that the "privilege" of being an American is granted by the presumably higher-ranking, governing powers that be.

This is an age-old view that our Founding Fathers rejected. First, they argued that the basic rights of life, liberty and the pursuit of happiness (i.e., economic liberty) were natural rights, endowed by our Creator, not by government. Second, the governing powers do not out-rank the citizens. Rather it is the citizens who grant government officials their "just powers." As Jefferson wrote in the Declaration of Independence, governments are instituted among men based on their consent in order to secure the rights of life, liberty and the pursuit of happiness. The notion that a governing authority grants privileges to those it governs directly contradicts Jefferson's declaration.
Once you decide that being an American is a privilege for which we must pay, then the possibilities for government mandates on our lives are endless. And isn't that approaching what we've been seeing from the Obama administration?

Lindsey then goes on to review the statistics of how large a percentage of our income tax revenues already come from those privileged wealth Americans. They're paying a higher share than when the top tax rate was 70%.
Stated differently, based on the data provided by the Census Bureau and the Internal Revenue Service, the relative tax burden of the top 5% of American earners compared with the remaining 95% has grown from roughly three-to-one prior to 1980 to almost six-to-one today.

One can always argue that this ratio should be 10-to-1, that the "privilege" of being governed is worth 10 times as much per dollar of income to someone who is rich than to someone who is middle-class. Once we give up our moral compass of government deriving its powers from the people. we must also give up any empirical compass of how much we must surrender to government. When you begin the argument that being a citizen is a "privilege" for which one should pay ever more, you very quickly find yourself on Friedrich Hayek's "Road to Serfdom."
And finally Lindsey faces up to the implications of Geithner's position.
This brings us to the third problem with Mr. Geithner's argument, a fundamental logical inconsistency. If being governed, or over-governed, is a privilege for America's citizens, shouldn't everyone pay for the privilege? Why are more than half of all American workers paying nothing at all in income taxes? And if the issue is the need to "pay more" for our privilege, why should only those making over $250,000 be the ones who pay more? If being an American really is a privilege, then certainly all who are thus privileged should pay something.
It all comes down to whether or not we ascribe to the Founders' view of America. If you believe that the power of the government flows from the people in order to protect our fundamental rights then we are not privileged to be Americans. Indeed, our government leaders are privileged to serve us.

3 comments:

Rick Caird said...

Nobody ever said Geithner was particularly bright. Here is a guy who could not do his taxes and blamed it on Turbo Tax and headed the NY Fed when the banks he was supposed to be regulating came down. It was silly to ever conform him as Treasury Secretary.

tfhr said...

Rick Caird,

And yet Geithner is all that is left of Obama's "brain" trust of economic advisers. Chilling.

I suppose when you share the same view of The Constitution and the Founders as your boss, being inept and a tax dodger might even help increase your tenure.

LarryD said...

This brings to mind an exchange from the movie 1776:

Dr. Benjamin Franklin: If I'm to hear myself called an Englishman, sir, I assure you I prefer I'd remained asleep.

John Dickinson: What's so terrible about being called an Englishman? The English don't seem to mind.

Dr. Benjamin Franklin: Nor would I, were I given the full rights of an Englishman. But to call me one without those rights is like calling an ox a bull. He's thankful for the honor, but he'd much rather have restored what's rightfully his.
[laughter]


Geithner is just trying to rationalize the envy his faction is steeped in.