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Don’t Soak the Rich, Let the Poor Help the Poor

The NYT has an interesting op-ed in defense of letting the filthy rich keep their money.  “Don’t Soak the Rich” argues that it is not tax collection that fights income inequality, but how government income is spent.  It argues that Germany’s regressive income tax structure is better at redistributing income that America’s putative preogressive tax structure.  It begs the question of how and where the government is going to raise the money it redistributes without raising taxes on the rich.  It seems to argue that the government can help the poor by taxing them and then giving them their money back.  This is exactly what the Republicans rail against when arguing against tax increases for the rich.   They say you know better what to do with your own money than the government does.  It is arguable that if the government increased taxes on lower incomes significantly that they would be less able to buy beer and cigarettes and the government could use that money to build infrastructure, new roads and airports.  But I don’t buy that argument.  If you need to raise money, you need to tax those who have the money, the rich.  Willie Sutton said he robbed banks, “Because that’s where the money is.”  It’s the same thing with taxes.  If as the op-ed says, government redistributions of wealth help level inequality, then you need to raise some money to redistribute, and the rich people have it.

I think most Americans who have an opinion would say that the old days of Eisenhower and Kennedy were better in terms of income equality, when taxes on the rich were much higher than today.  Ronald Reagan cut taxes dramatically, and America has become much worse for it over the years.  In the short term, Reagan’s tax cuts did not seem to pierce the soul of America, but in the decades since then, America has ceased to be a shining city on a hill, in large part because Reagan refused to pay the bill to keep the city’s lights on.  He destroyed that wonderful, shining city.

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