Practice What You Preach

Greg Easterbrook of Reuters wrote a serious, if at times mildly amusing article about some proposals to raise taxes on the wealthy in the United States.

He noted that while rich individuals such as Bill Gates and Warren Buffett declare that the wealthy should pay more in tax, then they do not practice what they preach. Indeed, he says, Barack Obama falls into that category, earning considerably more than the average American:

If Obama is in earnest about wanting increased taxes on the wealthy, then he should send the United States Treasury $182,998. That’s the difference between his Form 1040 Line 60 (“This is your total tax”) and what he would have owed at the higher rate (plus limits on itemized deductions) he himself advocates.

So why doesn’t he tax himself more? The Form 1040, after all, only stipulates the minimum tax an American must pay. More is always welcome. Obama should write a check to the United States Treasury for $182,998.

This very much reminds me of a local debate that I attended just before the General Election. During questions from the audience, a local Methodist Minister stood up and declared that he had earned £18,500 for the previous financial year. He was happy to declare this he said, and had even brought his documents so he could tell us exactly how much tax he had paid, which he then duly listed.

Later, when he eventually got to the point (funny isn’t it how during questions from the audience, more often than not, those who raise their hand seem to feel the incredible urge to give us their long winded opinion rather than actually ask a question?), he said that he was very happy to pay that tax and he got good value for it. He went on to say that he wished he paid even more tax and would be happy to pay it for such excellent public services, etc…

That was his opinion and while I do not share it I did not have a problem with him expressing it in the public forum. My immediate verbal suggestion to him was that he make a voluntary donation to the Treasury. No doubt it would be well spent on some worthy cause I told him. This he did not like.

Furthermore, what he rather failed to mention to the audience was that he lived largely rent and bill free in accommodation at the expense of the Methodist Church. Therefore, his supposedly ‘low salary’ as he said, was not quite all it seemed. How convenient.

Our Methodist friend, Barack Obama and much of the Left are made in the same mould. When they say that they would like to pay more taxes, what they really mean is that everyone else – or usually and more specifically those wealthier than themselves – should pay more tax. In a speech in April, Obama said:

Some will argue we should not even consider ever, ever, raising taxes, even if only on the wealthiest Americans. It’s just an article of faith to them. I say that at a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay a little more. I don’t need another tax cut. Warren Buffett doesn’t need another tax cut. Not if we have to pay for it by making seniors pay more for Medicare. Or by cutting kids from Head Start. Or by taking away college scholarships that I wouldn’t be here without and that some of you would not be here without.

Thus, in reality it all boils down to the size of the state – one of the real divides between Left and Right, socialist and conservative, or however else you wish to define those opposites. It is not so much an issue of tax, but of how many people the state should employ and the functions it should perform. Tax becomes the battleground, rather than the issue itself.

When Obama says that it’s ‘an article of faith’ to those who wish to keep taxes low, then the same could be said of the Left not wishing to reduce the size and scope of the state. The vast debts most Western economies have incurred have been borrowed precisely to facilitate massive increases in the state’s reach into all aspects of our lives. The state has, and always will be the means by which the Left attempt to reshape society.

Friedrich Hayek, wrong about much, was correct when he suggested that state socialism leads to totalitarianism. Even in the face of this mountainous national debts, the Left in most countries are loathe to reduce public expenditure, instead favouring increases in taxation to use the crisis to further the advance of the state.

By holding out against tax rises, and pushing for tax reform the Republicans in the United States are therefore actually doing what oppositions are meant to do, which is oppose the Government – unlike the Conservative Party before the previous set of elections or currently the Labour Party. Such opposition is necessary, even if it means running the risk of a U.S. default – which seems increasingly likely regardless of Republican actions.

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