Advancing a Free Society

Responding to Dr. Krugman’s column on tax cuts for the rich

Monday, August 23, 2010

In his column yesterday, Dr. Paul Krugman argues for raising the top marginal income tax rates on January 1.  His polemic is useful because it encapsulates most of the Left’s arguments.

Language trick #1: “We” (the government) should not “give money to the rich.”

But these [Republicans] are eager to cut checks averaging $3 million each to the richest 120,000 people in the country. … And where would this $680 billion go?  Nearly all of it would go to the richest 1 percent of Americans, people with incomes of more than $500,000 a year. … How can this kind of giveaway be justified …?

In this view of the world, revenues belong to the government and are allocated by policymakers as gifts to those who need or deserve them.  When you hear that “we cannot afford to cut taxes” and “we should not give tax cuts to ______,” you are hearing this philosophy.

Like a family or a business, the government does not “pay for,” “finance,” or “afford,” its revenue stream or changes to it.  You pay for your spending or you finance your spending.  If your revenues are insufficient to meet your spending, then in all other contexts we say you cannot afford the amount you’re spending.  The same should be true for the government.

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(photo credit: GmanViz)