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Wednesday morning during our KNPR panel discussion, LV City Life editor Steve Sebelius ridiculed the anti-socialist sentiments of Joe the Plumber and reminded listeners that America already “spreads the wealth around” via our existing social democracy and graduated tax system. Steve also commented on the strange (to him) fact that Heartland voters like Joe will often self-defeatingly vote “against their own self interest” by opposing tax increases on hgher income famlies that would enable tax cuts for themselves and/or the funding of entitlement programs that would benefit them.
It seems that Steve and others of like mind have trouble understanding a man who votes based on principle – even if that principle might not benefit him immediately and/or directly.
So: is Joe the Plumber, who one day hopes to own his own business and does not want to be taxed to death when he does, a big dummy for voting against the candidate who promised him a tax cut based on his present income? He’s recently answered questions about this, as well as his general opposition to wealth redistribution, and here is the gist of what he said:
He understands that he’s earning less than $100K right now and that Obama’s tax plan would therefore benefit him in the short term. But he also believes Obama’s tax plan and health care mandate will make it more difficult for him to succeed in the future (i.e. to start and then profit from a small business). Joe says he is content to pay his taxes, if they are fair and reasonable. He is willing to work hard and wants to earn his future wealth. He does not want special breaks or handouts that he knows come out of another man’s pocket. He does not want to pay less in taxes so another man has to pay more, and he does not want to be the man who someday pays more while others pay far less. He believes that lower taxes on businesses create jobs, which benefits everyone (because companies that make money will generally invest profits and expand).
But yesterday Jonah Goldberg echoed Sebelius in reminding us that whatever our principles and ideals, the U.S. is a social democracy with a progressive, redistributionist tax system. Our poorest citizens pay somewhere between 0 and 10 percent in federal income tax; the middle class pays 15 to 28 percent; and the highest earners pay 33 or 35 percent. He writes:
A new study by the Paris-based Organization for Economic Cooperation and Development reveals that the United States “has the most progressive tax system and collects the largest share of taxes from the richest 10 percent of the population.” Our tax system is, in fact, the most “pro-poor,” according to a Tax Foundation analysis of that study, of any developed country’s save Ireland. That’s right, we’re more progressive than France and Sweden.
The bottom 40 percent of income earners receive more from the federal income tax system than they pay into it. Meanwhile, the top 10 percent pay 71 percent of all income tax, despite only earning 39 percent of our pretax income. Taxes on the top 1 percent constitute 40 percent of tax dollars.
So here’s my question: Is sweeping tax reform a necessary part of a truly conservative agenda and should we therefore be pushing for a flat (or flatter) tax system? Or are we resigned to things as they are and content to squabble over the difference between 35 and 39%?
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Update: Steve Sebelius emails with the following:
Actually, if you listen to the [KNKPR] tape again, you’ll see I went out of my way to make it clear that IF a voter considers his own economic self-interest a factor, then a voter of Joe the Plumber’s situation would have voted for Obama. I did not necessarily endorse using one’s own economic situation as a guide to voting; surely, plenty of very wealthy people who would be taxed more heavily voted for Obama, and plenty of less well-off people voted for McCain. I don’t condemn them for voting on principle, and made that clear on the show.
Me: I guess I’ll have to listen to the tape. My impression in the moment was that Steve said guys like Joe are foolish and/or unintelligent and/or wrong for not voting in their own immediate economic self interest.
Update 2: Steve’s exact words were: “There are people voting the wrong way by not voting their economic interests.”
At least in that sentence, Steve was priveleging present economic interests over other factors, and indicating that voters (who don’t see it that way) are making a mistake.
However, Steve also says that the rich people who voted for Obama were voting against their own economic interest, and it was “the right thing to do.”
So, if someone like Joe votes against his own economic interest with a conservative/Republican vote, he’s voting wrong; but if a rich person votes against his own economic interest with a liberal/Democrat vote, he’s voting right…?
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