As talk of an across-the-board cut in income tax rates fills the air, critics are apt to say that those who “need it most” will get little relief. The critics believe that wealthy people already have enough money and thus need no more. But low-income people do need more, so any tax-cut plan should primarily help them.
Those critics are little bothered that the bottom 50 percent of income earners pays a scant 4 percent of the tax. Far from paying income taxes, many low-income people receive cash through the misnamed Earned Income Tax Credit. Meanwhile, the despised top 1 percent pays a third of the tax. The top 5 percent pays over half!
But these days it is considered cruel to insist that tax cuts should primarily relieve those who actually pay taxes.
Harvard economist Richard Freeman and Eileen Appelbaum of the Economic Policy Institute are among those who consider it cruel. In a recent New York Times op-ed they proposed that instead of a tax-rate cut, the government should stimulate the economy and reward people for the budget surplus by paying out a one-time $500 “dividend” to every permanent resident—adult and child. The reason for the equal amount is that “Our current surplus is America’s return on 10 years of good economic performance, to which all of us have contributed.” Well, some have contributed more than others. And as we saw above, some have definitely contributed more to the surplus than others. But we’ll let that go for another occasion.
For Freeman and Appelbaum, a dividend has many advantages over a tax cut. Chief among them is that “the stimulus [w]ould be targeted to people who need it. The prosperity dividend . . . would mean the most to low- and middle-income families with young children. (A married couple with two children would receive a total of $2,000.) These families would be likely to spend all or most of the dividend on goods and services. [Yeah, the rich would just invest it and make more money.] If they were in financial distress, they could use it to pay down credit card debts.”
There’s that word “need” again. Why is need the criterion? Because people like Freeman and Appelbaum do not believe an individual has the right to control his earnings and live for his own sake. Didn’t some Russian-born woman novelist warn us about such people?
Very well. Let’s accept need as the criterion. No one should get a tax cut unless he needs it. But if we are to avoid authoritarianism, we certainly can’t have the government determining what people’s needs are. The only solution, then, is to ask each taxpayer if he needs a tax cut. If a taxpayer says no, he won’t get one. If he says yes, his taxes will be lowered.
What could be more fair?
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For many people, environmental protection requires bureaucratic empowerment. The theory and practice are flawed, according to Christopher Lingle.
At least parts of the environmental movement assume that people intrude on nature, which would be better off without the human race. But the terms the environmentalists use belie their case, as Daniel Hager shows us.
Is the earth experiencing an unprecedented warming? Not by a long shot, writes Michael Heberling.
It can be difficult to see how quality education could result from a spontaneous, unplanned marketplace. Yet, says Chris Cardiff, there is a vivid example for everyone to see.
To hear the legislators and judges tell it, our rights are subject to exceptions and considerations of the purpose they were intended to serve. Jeffrey Snyder says that view leads to the destruction of rights.
If comic books are any measure of the state of the culture, what do they have to say about liberty these days? Raymond Keating conducts a survey of his favorites.
The government’s postal service is taken for granted as a proper function of government. But Wendy McElroy reminds us that state control of the mail has always been about something other than efficient, courteous service.
The presidential oath of office and the Pledge of Allegiance are strangely different. Jim Peron explains why.
In Canada, the medical use of marijuana is permitted, but not the recreational use. Karen Selick has trouble squaring that conflict with the country’s Charter of Rights and Freedoms.
Socialists everywhere celebrate May Day this month. William Peterson takes the opportunity to reconsider the father of “scientific socialism.”
Here’s what our columnists have come up with for this issue: Donald Boudreaux writes that the framing of a question is critical. Lawrence Reed defends term limits. Doug Bandow warns that the crusade against DDT is a tragic mistake. Thomas Szasz has some choice words for Dr. Kevorkian. Dwight Lee continues his look at the environment. Mark Skousen says you can’t tell sound economics from Adam. And Charles Baird sounds the tocsin about a Clinton executive order.
Subjects catching the attention of our book reviewers are: fame, free speech, the history of the struggle for freedom, the efficacy of government, childhood, and Grover Cleveland.
Twila Brase’s February article, “Blame Congress for HMOs,” included an incorrect date. The sentence should have read, “Congressional testimony reveals that between 1969 and 1971, physician fees increased 7 percent and hospital charges jumped 13 percent, while the consumer price index rose only 5.3 percent.”