Greed And Exploitation: Why Tax Cuts Are Not More Popular

by | Oct 27, 2000

Suppose you and I go to a fancy restaurant. Under which scheme would it would be more likely for me to order a $150 bottle of Chateau LaFite Rothschild Bordeaux wine, chateaubriand and a $200 bottle of Chateau d’Yquem to go with our dessert — if you’re paying the bill, or if we each pay […]

Suppose you and I go to a fancy restaurant. Under which scheme would it would be more likely for me to order a $150 bottle of Chateau LaFite Rothschild Bordeaux wine, chateaubriand and a $200 bottle of Chateau d’Yquem to go with our dessert — if you’re paying the bill, or if we each pay for what we order? The answer’s a no-brainer. If you’re paying the bill, why not sock it to you?

That scenario explains why Republican who calls for tax cuts don’t enjoy more popularity. It also explains successes Democrats have in exploiting the issue. According to the most recent U.S. Treasury Department figures, in 1997 the top 1 percent of income-earners (those with income of $250,000 and higher) paid 33 percent of all federal income taxes. The top 5 percent of income-earners ($108,000 and over) paid 52 percent, and the top 50 percent ($36,000 and over) paid 96 percent of income taxes. Guess what the bottom 50 percent of income earners paid?

If you’re among those who pay little or no federal income taxes, what do you care about tax cuts? Moreover, if you think tax cuts pose a threat to government handout programs, you might be openly hostile and support Al Gore’s silly “risky scheme” talk. So many Americans paying little or no federal taxes makes for a natural spending constituency. It’s like me in the restaurant: What do I care about extravagance if you’re footing the bill?

We hear political demagogues like Vice President Gore and Rep. Dick Gephardt, D-Mo., in their efforts to create class warfare and envy, whine about “winners in life’s lottery” and “tax cuts for the rich.” It would seem that by now at least one of our know-it-all media elite might have asked: At what income level does being a “winner in life’s lottery” begin? How much income qualifies one as being rich?

Does being rich start with that 5 percent of Americans who earn $108,000? Or, does it start at $250,000? Why not some media interviews with men earning $108,000 or $250,000 a year with a wife, two youngsters in college, a home mortgage and car payments and ask, “Do you feel rich?” A $100,000 or $200,000 yearly salary is nice, but it hardly qualifies as rich. It’s not even yacht, Learjet and country club money.

Another question not asked of “risky scheme” politicians is how can a person be given an income tax cut if he doesn’t pay any income taxes? Gore’s idea of targeting tax cuts to the lowest 50 percent of taxpayers is a devious scheme to avoid tax cuts — and keep more money in Washington.

This year’s political demagogues whine that treatment decisions should be left with patients and their doctors, not some HMO “bean counter.” But early in the Clinton-Gore administration, there was that failed attempt to socialize our entire health-care system. Had Clinton and Gore been successful, there would have been government “bean counters” who would have been dictating to doctors.

Right now if you are dissatisfied with your HMO, you can purchase other forms of medical insurance or even pay out of your pocket. Under the Clinton-Gore socialized medicine scheme, those options would not have existed. You would have no recourse to federal government medical edicts. In countries with socialized medicine, the government decides who does and who does not get medical treatment. For example, 20 percent of kidney dialysis centers in Europe, and 50 percent in England, refuse to treat patients over 65.

Ignorance creates a fertile climate for demagogues; maybe that’s why politicians give so much support to the public education establishment.

Walter Williams (March 31, 1936 – December 1, 2020) was an American economist, commentator, academic, and columnist at Capitalism Magazine. He was the John M. Olin Distinguished Professor of Economics at George Mason University, and a syndicated editorialist for Creator's Syndicate. He is author of Race and Economics: How Much Can Be Blamed on Discrimination?, and numerous other works.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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