Tax Me More! (We Need a Guilt Tax)
Posted: May 9th, 2011 | Author: Joe | Filed under: Taxes | Tags: Guilt Tax, Opinion, Taxes | 1 Comment »I don’t know about you, but I’m getting tired of hearing “the rich” whine about not paying enough in taxes.
I’ve seen stories and heard interviews along these lines steadily increase year after year for the past few years now.
Warren Buffett, Bill Gates, and many Hollywood types often claim they just wish the tax rates were higher because it’s “not fair” that they don’t pay more in taxes. (Of course, at the same time they do everything they can to shield their income and assets from incurring any taxes..)
Here’s a recent example (about half way down the article):
“Eric Schoenberg says to sign him up for paying higher taxes. Schoenberg, who inherited money and has a healthy portfolio from his days as an investment banker, has joined a group of other wealthy Americans called Responsible Wealth, which is project of the group, United for a Fair Economy. Their goal: Raise taxes on rich people like themselves.”
It sounds nice, doesn’t it? “United for a Fair Economy”. After all, who wants anything that’s unfair, right?
Well, if we want to be picky about it, the fairest tax would be a simple flat tax – the same rate for the rich and poor alike. But people don’t really want a “fair” tax, they want the rich to pay more simply because they have more.
Personally, I don’t have a problem with rich people. I think the vast majority of them are hard working entrepreneurs who made a choice to focus on business and career instead of family. I myself have made the opposite choice. I focused more on family than career, and have no regrets passing up an opportunity to be making a six figure income in place of dining at home with my wife and 3 kids every night as a family.
But I know, not everyone feels the same way. And apparently, there are a number of “rich” people who feel quite guilty about their success (or in the case of Eric Schoenberg, there ancestor’s success and his own dumb luck).
Let the rich pay more in taxes, don’t force them.
That’s why I propose a new feature to the tax form, akin to this $3 donation question found on the 1040 tax form which asks the tax filer:
Do you want $3 of your federal tax to go to the Presidential Election Campaign Fund?
Call it the “I’m rich and feel guilty” checkbox. It could simply state:
Do you feel that the federal government would do a better job of spending your money than you would?
The tax payer would then check “yes” or “no”. And there could be a new line item under the yes box where the tax payer could enter in the amount they would like to donate to the government in the form of extra taxes.
See, the fact is that while the federal government spends money prodigiously, it does not do so wisely. As Milton Friedman pointed out, when your money is spent by someone else on someone else (as it is in any government program), there is no incentive to get the best value for the price paid.
One of the things that has contributed to America’s success in its remarkable history is its system of limited government. The historic norm has been that wealthy Americans are free to keep their wealth and spend it as they see fit.
Sure, there are some who will be greedy and spend it on yachts and then try to “ evade paying tax on it. But for every self serving, societal leach you will have many other Buffetts and Gates’s that will choose to spend their fortunes on foundations for the betterment of mankind.
After all, who believes that raising the taxes on the rich is going to do anything to help feed the poor or fix the spending problem in Washington D.C.? Besides, there is apparently a fund at the Treasury Department for people to donate money, but few do.
[...] the wealthy in America really want to sacrifice, let them pay extra taxes.Make it in the form of a donation to the federal government that they can enter in whatever amount they see as fair “sacrifice” for the greater [...]