By Jacob Vito
A great many things came from President Joe Biden’s recent State of the Union policies and proposals that will not only be discussed on the House and Senate floors for months and years to come but also signaled a more progressive direction for the administration. Sadly, it doesn’t seem that anyone wants to talk about those policies yet. No, as it so is often, the focus of the entire country immediately went to taxes.
This Wednesday, Biden further spoke to the press on one of the most controversial parts of his $4 trillion economic plan: increased taxes on the rich. The tax hikes, announced during his recent State of the Union address, should supposedly pay for the administration’s new expenditures in education, infrastructure and jobs.
And, as with all discussions about taxes, the issue became divided very quickly. Senate Majority Leader Mitch McConnell and many other conservative legislators have voiced opposition to the proposal, arguing that family estates could become too heavily taxed in the future.
However, such worries may not even be necessary. In the same announcement, Biden stressed, “We’re not going to deprive any of these executives of their second or third home, travel privately by jet.” Though they’ll undoubtedly be notable and noticeable, Biden’s goals with this plan seemed far from over taxation.
And because of that relatively minimal impact on the livelihoods of those potentially affected by these changes, the discussions surrounding these taxes begin to take a different shape. Ultimately, they revolve around an old and vital question: from the perspective of taxes and governmental policy, what is the best incentive for a good economy?
Those with more laissez-faire economic perspectives will propose that a fundamental reason for keeping a low tax rate is incentivizing success and progress. From their perspective, the Steve Jobses and Jeff Bezoses of the world ought to be as rampant as possible, so their vision and ingenuity can benefit most.
From such a position, taxes and government overreach should be quite low to naturally allow for these critical and intelligent figures to best find the way to make everything work. Their arguments ultimately come from a position that wants as much innovation in the economy as possible. It’s a well-put-together ideology. There is, however, a bit of an issue with it.
It’s entirely wrong.
For one, much of the “innovation” of private enterprises are built off of publicly-funded ventures. Systems like the internet, GPS devices and the tech behind our beloved iPhones were developed through military research, NASA projects or government-sponsored research.
What’s more, there isn’t even conclusive evidence that the promise of outrageous wealth encourages greater productivity. Coops, a type of enterprise where its employees collectively own a company, tend to not only compete with the productivity of private firms but do so in a manner that lasts far longer on average.
It is overwhelmingly visible that not only is the innovation promised by high earnings largely co-opted from existing public technology, but the productivity it is supposed to encourage does not exist either. Very simply, the runaway salaries of executives that Biden’s plan would tax do not serve a tangible economic purpose.
And importantly, this growth in tax revenue isn’t going to line the government’s coffers. These taxes have been specifically drawn up to pay for expanded childcare, publicly funded community college and rapid growth of U.S. jobs. These are programs that will unquestionably help raise the standard of living for the average American.
And yet, the talking points remain. The same song and dance of incentivizing success are brought up, regardless of its lack of concrete evidence.
And sure, perhaps that average person doesn’t have the time or resources to properly research something like this. But the economists, and especially politicians, do. It’s their job to find and have information regarding important metrics like these. So, why would they not realize their mistake?
Well, that’s just the thing: they’re not mistakes. They want to keep their money.
Senate Leader Mitch McConnell has a net worth of over $34 million. Other legislators are worth even more, with Republican Senator Rick Scott holding $260 million to his name. In total, the majority of Congress is made of millionaires. When they vote on whether to tax the rich, they’re deciding whether they should tax themselves. Unsurprisingly, it’s something they often say no to.
But the decisions of the legislature are never without consequence. As taxes on America’s wealthiest have fallen for the past 40+ years, the country’s deficit has ballooned. Corporate regulations, especially those in the financial sector, have been periodically defanged to continually allow for the recessions that lay off millions. And to top it all off, beneficial programs have their budgets slashed to cover up the size of the manufactured budgetary shortfall.
The deck is very much stacked in favor of those in Congress. But they chose to take such actions, even when the consequences for them were visible. Why would they let such things happen on purpose?
The overwhelmingly wealthy, powerful members of Congress don’t care too much. They harbor no thoughts about the workers now injured and overwhelmed because of their regulations loosening. They harbor no thoughts about the man sentenced to life in prison on the drug laws they passed. They harbor no thoughts about the family that will go hungry when they cut food stamps. It’s just a game, except the pieces they’re playing with are the lives of millions.
So, if tomorrow one senior senator or other rants impassioned about why cutting taxes for the sake of the rich is a good thing, please don’t fall for it. It’s nothing more than a lie spoken enough times to sound authentic.
Instead, try to look at the world from a different perspective than a legislator’s or CEOs. Instead, look with the eyes of those with the least. Think of that laid-off worker, or that wrongfully incarcerated man or that hungry family, and ask: what is it that they deserve? How can they be helped? What can make the world better for those who suffer in it? Answering those questions will make this country far better than a tax break ever could.
There’s a quote from the Bible. It’s a book that many fiscally conservative legislators love to speak about, so I’ll assume that they’ve read it and are just being hypocrites. “And the King will reply, ‘Truly I tell you, whatever you did for one of the least of these brothers and sisters of mine, you did for me.’”
Jacob Vito is a first-year Community and Regional Development major at UC Davis. He is from western Pennsylvania.
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