FauxPolitik

Tuesday, May 13, 2003

Taxing on the Curve: Good distinction, 'twixt fairness and efficacy. It certainly is good, from the point of view of the government, to be able to milk the rich. I think this is why it's presumed so often to be fair: milking the poor, as you said, is not a particularly good idea, and the cash has to come from somewhere. Voila! This reasoning engenders the kind of taxation that Stephen Moore and even Ted Kennedy are willing to call "confiscatory": marginal rates of 70% or more. (Notice that things have to be at the far end of the confiscatory curve to get Moore and Kennedy in agreement. I'm certain Moore and I could agree on a lower figure.)

Anyway, progressive tax rates keep the government in business. Barring a real revolt at the polls, I don't see anything happening with the tax code (other than more additions, deletions, revisions, credits, loopholes, and targeted rollbacks -- all of which guaranteed to make life hell for taxpayers). But as long as we're stuck with the monster code, maybe we could sneak something in to cap the system. Bush drew his line in the sand in 2001 (anything over 33% is confiscatory) and then promptly signed in a rate of 35% that takes 10 years to kick in, then goes right back up to 38% the next year, all after he's comfortably out of office. Profiles in courage, dude.

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