“The freedoms won by Americans in 1776 were lost in the revolution of 1913.” Even in the early 20th century, Frank Chodorov distinguished one of the main threats the American economy faces today, the income tax problem, better classified by the left as the “redistribution of wealth through labor revenue theft” tax. The income tax includes fundamental elements that create disincentives for the free market, which in turn lowers opportunity for economic growth. With such flaws being present, how does the left defend such a viewpoint?
The left’s argument for the income tax is very simple. Income taxes remain one of the main sources of government revenue, stretching to just about 45% of all incoming funds. That monetary resource is redistributed to pay for government operations such as the military and entitlements. According to the left, the government should enforce a stricter fiscal policy in order to constantly expand itself and lend a helping hand to the common American. Keynesian economics, which many on the left subscribe to, supports an idea that more government spending stimulates economic growth by encouraging American citizens to spend more. However, the left makes a mistake of correlating government expansion with economic growth. If all the tax payer dollars go into the government’s pocket and entitlement funds such as social security, where is the economic growth? How can such an economy be sustainable if citizens, especially the top 10% who create a majority of capital and tax revenue, are having the fruits of their labor stolen and their future hard work being dis-incentivized?
Recently, Hillary Clinton went out on a limb and said “the rich should be paying their fair share of income taxes” as if those making over $250,000 didn’t account for 51% of all income tax dollars in the US. However, to the average leftist, the appeal to equality of outcome is very strong, so having the rich pay a disproportionate amount of taxes is fantastic! Why not use the excess money earned by the one percent to fund big government policies? Unless of course, you are one of those tax payers, in which case life under a leftist government will continue to promote the theft of labor of hardworking Americans who attempt to expand their economic prospects. Instead of rewarding such behavior, it seems evident that the left wants to promote fairness of outcome rather than supporting fairness of opportunity.
Let us now attempt to construct such a new system. Following Adam Smith’s economics, proportionality needs to remain a priority. Namely, the wealthy should pay a proportionate amount of tax based on their contributions to the economy and income and not a disproportionate amount as the left claims. By lowering the tax brackets from the 25-40% range by 10 % percent respectively (i.e., an individual paying 40% pays around 30 %, although these numbers are adjustable), we re-incentivize businesses and markets to continue to expand. Larger businesses can hire more and possibly with more competitive wages based on skill set. This also allows lower class americans to become apart of such a growing workforce and to expand their own investment capital in order to generate more wealth overall. The overall 10% drop from each tax bracket is, after all, a start to a system that will require far more readjustment to ensure equal opportunity and liberty.