Thursday, October 22

What does it take to make a progressive happy?

I've talked a lot about the way that making our tax system more progressive has made tax revenues more volatile--they're higher when the economy is booming, and lower when the economy is in depression.  But even I am struck by this image from the Congressional Budget Office:
 tax revenues.gif

Income taxes, especially corporate income taxes, are sharply off. But revenue from the payroll tax, which is our most regressive, basically hasn't dropped at all.

There are a lot of reasons why we can't pay for all the new spending Obama wants just with taxes on the rich, but this may be one of the most compelling:  if we do, we'll be forced to borrow massively every time there's a slowdown.
I suppose that in the left's dream world this won't be such a problem, because slowdowns will be moderated by European-style regulations and workforce controls (e.g. companies aren't allowed to fire people). And economic growth will be likewise moderated.

It can be difficult to get them to admit the logical conclusion of their favored policies, but they effectively don't care much about GDP growth. In the interest of fairness, they basically only care about making sure "the rich" don't get too much richer (i.e. invest their wealth and create "too much" more wealth).

And so progressives might bemoan America's "shrinking middle class" in their talking points. When you show them data that this is because more people moved into the upper class since 1980...

It still freaks them out. Eeek! More rich people means a greater gap between the rich and poor. That's bad, because it's unfair.

Which is why per Obama's own campaign gaffe—defined as a politician unintentionally stating the truth—the left wants to spread this wealth around (i.e. redistribute with more progressive taxation).

I've previously posted this video of Margaret Thatcher responding to a leftist on the rich-poor gap in 1990:

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