E.J. Dionne has a dreadful piece in today’s Washington Post. He argues, first, that we need to tax families earning more than $250,000 (the “wealthy,” for Dionne) more:
The simple truth is that the wealthy in the United States — the people who have made almost all the income gains in recent years — are undertaxed compared with everyone else.
Consider two reports from the Center on Budget and Policy Priorities. One, issued last month, highlighted findings from the Congressional Budget Office showing that “the gaps in after-tax income between the richest 1 percent of Americans and the middle and poorest fifths of the country more than tripled between 1979 and 2007.”
The other, from February, used Internal Revenue Service data to show that the effective federal income tax rate for the 400 taxpayers with the very highest incomes declined by nearly half in just over a decade, even as their pre-tax incomes have grown five times larger.
The study found that the top 400 households “paid 16.6 percent of their income in federal individual income taxes in 2007, down from 30 percent in 1995.” We are talking here about truly rich people. Using 2007 dollars, it took an adjusted gross income of at least $35 million to make the top 400 in 1992, and $139 million in 2007.
So, his reasoning for why households with income more than $250,000 per year should be taxed more is:
His first argument reveals precisely what he (and many on the left) truly believe government is for. Government is a tool to be used to change and order society into their perfect model. Not equal opportunity—he wants to level outcome, as well. He wants to create equality of outcome by reducing how much one person has rather than increasing how much the other has. Shouldn’t we be focused on progressing so the less well-off are better, rather than making the well-off worse?
His second argument is specious. He says, because the top 400 individuals have an average tax rate of 16.6%, we should tax households with income over $250,000 at higher rates. He is justifying taxing households with $250,000 income per year with evidence for individuals with $138 million of income per year. Forget sleight-of-hand. It’s just idiocy.
But worse, Dionne ignores that individuals have an effective tax rate of 16.6% not because their tax bracket has too small of a rate, but because (1) much of that income is likely from capital gains, and thus taxed at 15% (a lower rate encourages investment), and (2) due to the maddeningly-complex nature of our income tax law.
Our tax law is riddled with exceptions and deductions which allow people to decrease their effective tax rate. Increasing their tax rate is like turning the water pressure up on a leaking hose: yeah, you’ll get more pressure, but it is a hell of a lot more efficient just to fix the leak. His complaint only highlights that our tax law must be eliminated and replaced with a much simpler system at a lower rate. Paul Ryan’s Roadmap for America has an excellent plan for doing just that.
Dionne wasn’t quite finished, though. He then argues that the Senate should be reformed because:
Does any other democracy have a powerful legislative branch as undemocratic as the U.S. Senate?
When our republic was created, the population ratio between the largest and smallest state was 13 to 1. Now, it’s 68 to 1. Because of the abuse of the filibuster, 41 senators representing less than 11 percent of the nation’s population can, in principle, block action supported by 59 senators representing more than 89 percent of our population. And you wonder why it’s so hard to get anything done in Washington?
The filibuster is absolutely being abused by Senate Republicans, but Dionne isn’t targeting the filibuster with his angst; he’s criticizing the Senate’s fundamental structure.
Congress was set up with two houses for a reason. The House was meant to represent the people directly, a true representative democratic body, with advantages to larger states. The Senate, however, was not; it was meant to represent the states on equal ground. Not the people. The states, where Rhode Island has just as much power as Virginia. Or New York.
We have already severely weakened this arrangement by allowing popular elections of senators, but if we based representation in the Senate on population just as we do the House, there would be no reason to have a bicameral legislative body. There would be no difference between the two.
Dionne’s agitation at the Senate’s anti-democratic structure points to his misunderstanding of what the U.S. was meant to be, and to some extent still is. The U.S. was never intended to be a democratic nation. It was intended to be a republic, where democracy is utilized to preserve the rights of the people and welfare of the nation. “Democracy” in the U.S. is not an ideal; it is a means, a tool, toward achieving greater ideals.
Rule by the people is a good tool, but it must be utilized properly. Providing no check against larger states abusing smaller states threatens our union. This must not be forgotten.