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What Price 'Fairness'?
Townhall.com ^ | November 20, 2012 | Mona Charen

Posted on 11/20/2012 4:41:41 AM PST by Kaslin

Realistic Republicans understand that President Obama and the Democrats head into fiscal cliff negotiations in a far stronger bargaining position now than in 2011. When voters were asked on Nov. 6 whether they favored raising taxes to reduce the deficit, a total of 60 percent said yes (47 percent favored increasing taxes for those who earn $250,000 or more, and 13 percent approved tax increases for all).

So taxes will be going up. As a matter of political strategy -- not to say survival -- Republicans will have to agree to raise taxes on those defined as rich. It's more than just the exit poll on support for tax increases. Republicans must also contend with the Pew poll that asked who would be more to blame if a fiscal cliff deal were not reached. Before a single meeting has been held or talking point fed to the press, 29 percent said they'd blame President Obama, while 53 percent said they'd blame Republicans in Congress.

President Obama sounds so reasonable when he asks for a "balanced approach" to deficit reduction. Whether the implied spending cuts -- the flip side of his balance -- will materialize is the great question.

Obama is the anodyne face of a leftist party -- a party perhaps best defined by Massachusetts Senator-elect Elizabeth Warren. Her speech to the Democratic Convention in September was a protracted roar of grievance, a fulmination against the (imagined) entrenched interests who were "rigging the system" against the poor and the middle class.

Wow. A nation that is skating to the brink of bankruptcy because it spends so much on the middle class is whipped into a righteous frenzy about how rigged the system is toward the rich? As the Washington Post's Robert Samuelson wrote in April, 60 percent of the federal government's non-interest spending goes to transfer payments to the poor and middle class. Spending on the 10 largest means-tested programs -- that is, programs for the poor -- has increased from about $4,300 per person in 1980 to $13,000 per person in 2011 in inflation-adjusted dollars.

The bill for this spending is disproportionately paid by the wealthy. The top 20 percent of income earners pay 70 percent of the taxes. Soon they will pay even more. If this is what happens when the rich rig the system, the poor and middle class should beg them to keep rigging it.

The Democratic Party is consumed by the insatiable appetite to make America "fairer" -- by taking from some to give to others. As noted above, the U.S. tax code is already steeply progressive. You needn't love the rich to understand that chasing the goal of redistribution rather than growth can result only in everyone becoming poorer.

Like many European social democratic countries, the U.S. has gotten into trouble by spending far more than it collects in taxes. Andrew Biggs, Kevin Hassett and Matt Jensen examined studies on how other nations have recovered from their fiscal improvidence. Looking at 21 countries over 37 years, they concluded that effective resolutions are rare (only about 20 percent of cases) and successful attempts to balance budgets rely heavily on spending cuts, whereas failed ones rely on tax increases. What about the "balanced" approach? "On average," the authors noted in the Wall Street Journal, "the typical unsuccessful consolidation consisted of 53% tax increases and 47% spending cuts."

Yes, taxes are going up, but let's remember, as we bow to the inevitable -- that raising taxes on the rich will put only the most trivial dent ($80 billion according to one proposal) in our trillion-dollar annual deficits. This is the great god "fairness" appeased, while the demon debt continues to breathe fire.

The sane policy goals for a nation in the kind of trouble we're in would be economic growth and entitlement reform. The progressive agenda, Richard Epstein writes in "Why Progressive Institutions are Unsustainable" (Encounter Books), supplies a "one-two punch." First, it reduces the private sector by ill-advised regulation. "Second, it imposes extensive and counterproductive programs of redistribution that cannot be supported by a stagnant economy and a shrinking productive wealth base. As that base gets smaller, the demand for a stronger safety net induces yet another round of transfer payments and makes the tax burden heavier and the rate structure more progressive. The new redistributive tax regime in turn exerts greater negative pressures on production levels."

And down we go. The worship of "fairness" is a death cult.


TOPICS: Business/Economy; Culture/Society; Editorial
KEYWORDS: bankruptcy; barackobama; fiscalcliff; taxes
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To: Kaslin

I tell you what. If I were a rich business owner right now, I’d shut it down, sell it off, give it all to a no-kill animal shelter and live in a hut like the Unibomber rather than hand it over to the government of this country.


21 posted on 11/20/2012 6:37:58 AM PST by A_perfect_lady
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To: Kaslin

Mona Charen is falling for the majority rules fallacy. That’s not how our government works, Mona. You beltway dummy.


22 posted on 11/20/2012 7:01:48 AM PST by 1010RD (First, Do No Harm)
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To: magellan
Obamacare will provide federal subsidies to those at 400% of the poverty level. For a family of four, that means families with household incomes approaching $90,000 per year will receive subsidies. Congratulations, you are now "poor".

This statement is not accurate.

An accurate statement would be ..."Obamacare will provide federal subsidies to SOME OF those at 400% of the poverty level.

There will be SOME people who contact their social worker, immigration adviser or local ACORN office and request these benefits. Same thing with food stamps, WIC, section 8 housing, medicaid, etc...Then there will be OTHER people who may be eligible but don't seek the benefit.

I have been thinking lately, what would be the consequences if everyone who was technically eligible, got the benefits?

We know already that the system is unsustainable. If we were to exaggerate the faults of the system by having everyone eligible "draining the teat", the system would fail far sooner than it would otherwise.

23 posted on 11/20/2012 7:04:17 AM PST by nitzy (A just law will neither punish virtue nor reward vice.)
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To: traditional1

Throw in licensing, restrictive work regulations and illegal immigrants and you’ve got the perfect policy for a permanent urban underclass.

Welcome to the late Roman Empire 21st century style.


24 posted on 11/20/2012 7:05:33 AM PST by 1010RD (First, Do No Harm)
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To: BuffaloJack

Great comment.


25 posted on 11/20/2012 7:11:23 AM PST by 1010RD (First, Do No Harm)
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To: Kaslin
(Article)
As a matter of political strategy -- not to say survival -- Republicans will have to agree to raise taxes on those defined as rich. It's more than just the exit poll on support for tax increases. Republicans must also contend with the Pew poll that asked who would be more to blame if a fiscal cliff deal were not reached.


Meh, another neocon says she likes new taxes.

Well, of course she does. Atlantic Seaboard social liberals (like neocons are) always like higher taxes. Infrastructural projects, social welfare b.s., whatever. As long as you can still get good knishes at 2 a.m.

Trouble is, Obama and his orcs are going to keep coming back until they've got it all.

26 posted on 11/20/2012 11:47:31 PM PST by lentulusgracchus
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To: SamuraiScot
No taxes. No deal. In fact, no taxes on anything the House doesn't like. This is a war. If you have no position, you have no base on which to fight and eventually win.

Bump. This is a straight-up staring contest. Republicans must not blink, or they open the door to 50-60% taxation levels on everybody -- once they give up the principle Obama is trying to get them to give up.

27 posted on 11/20/2012 11:55:53 PM PST by lentulusgracchus
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