This is a time when our country is deep in debt, and many are out of work (through no fault of their own). Finding ways for people who aren’t hurting to avoid paying more taxes (when they are at historically low levels already) isn’t something I want to find common ground on. I just think it’s wrong. I think it grows out of a me-first, screw others mentality that sees no value in being part of a larger society.

There has been (over the last 30 years but especially over the last 10) a massive distribution of wealth from bottom to top — particularly to the top 1%. Unless this is reversed, I see the US continuing a slide into third-world nation status. This country was a much more pleasant place when the middle class was larger, and both the plutocracy and impoverished were smaller groups.

How a reversal is accomplished is a useful debate, but on the face of it, continuing tax breaks for those who don’t need it seems the wrong approach.

I agree on some of your points about capitalism being corrupted here. Although capitalism is an economic system and not a form of government (as some seem to think) it can be used effectively, provided it is regulated. The unfettered capitalism we have allowed to flourish here since the early 1980s is producing more losers than winners.

Full disclosure: I am a small-business owner and also am part of the 3% mentioned in your original article.

Thanks very much for your comment.

There is a lot to digest in there and our blog post entry was aimed at stimulating conversation. Statistics can be used in many ways and two different set of eyes can interpret the same data completely differently. For example, your stats about bubbles and depressions when tax rates are higher doesn’t consider other factors that changed during those time periods as well, such as unhinging the tie of currency to a gold standard. Without suppressing all variables and simply testing one at a time (which is impossible when we look at history), then it is all guestimation work and many different positions can be taken from the same data. So rather than go point by point with you, which is argumentative, I would offer the following:

The question is best framed as to the optimal level of taxes versus whether it should be more or less than current levels. If we extrapolate your comments for higher taxes all the way to 100% taxes, the economy obviously would fall apart due to no profit potential for anyone and consequently no incentive. Conversely, if we extrapolate the lower taxes comment all the way to 0% taxes, then there is nothing to cover even base level of services that are required for a functioning society.

If you can agree to those statements, then the key is to figure out the appropriate level and if it should be different for some than others. I think the first question is easier in figuring out how much revenues are needed, after we all decide as a society what a government should be providing (which is a big question that currently remains unanswered, but is addressed with every election).

The second question is a bit more difficult and philosophical. I would therefore propose that the question that is most important is how one defines “fair” in terms of who should pay what. On one side of the argument, conservatives say that it should be measured in absolute dollars and all should pull their own weight. While on the other side of the fence, fairness is in the eye of the beholder as to percentages and what “feels” right based on how much people have or earn. If we are being honest with ourselves, I think there are probably issues with both of these approaches and the answer probably lies somewhere in the middle. If that is the case, then it is best solved by the ongoing dialogue that you and I are having…and the more people that are brought into the discussion, the more votes we have to get towards an appropriate answer for our given society. That is what democracy and capitalism are all about…and while it is imperfect, it is probably the best of all evils in terms of government approaches.

Unfortunately, too often we don’t actually have capitalism as it was originally defined: serving others for what they are willing to pay. Instead, we often have what I call crony corporatism, which gets confused for capitalism. Pure capitalists are as enraged about the current system of playing favorites, kickbacks, etc….

The good news is that people are awake about this topic, and care…rather than being apathetic. There is a middle ground here and we are happy to be stimulating the conversation. The more people that voice their opinions respectfully (versus falling into Camp A, Camp B, or Camp I don’t care), the more votes and ultimately the better answer we come up with. A side benefit will be the more likely politicians will listen to the larger number of voices versus sticking to their ideological positions

Thanks again for your post, and for caring.

Your original postulation was incorrect. Businesses are not hiring because demand is low — not because they are worried about losing tax breaks. Want to stimulate demand and therefore hiring? Put money in working people’s pockets. The lower their economic status, the faster they will spend it right back into the economy….boosting demand. Demand drives hiring.

I see the easiest most directly-stimulative way to do this is to restore the unemployment benefits that run out today to 2.5 million Americans. Also, keep the tax cut for the first $250K of everyone’s income, and let the rest pay the extra 3% — they don’t need it.

Earmarks are irrelevant. They don’t control how much money is spent — only where it goes. It’s a small piece of the pie anyway.

The stimulus did work — we would be in worse shape now if we hadn’t done this. It simply was too little and too late.

Even Warren Buffett recently said he thought the rich should pay more of their fair share of the tax burden. Historically, this country had more growth and a more stable economy (fewer bubbles & depressions) when the top tax rates were at 74% or even 91%. Rather than extract as much money from their businesses, owners reinvested it — further driving the economy.

So no, I don’t think it’s anyone’s patriotic duty to pay lower taxes — the reverse is true. Unless you want this country to look like Mexico in a few decades.