|Comments on NY Times article on rightwing tax cutting by Tracy Mott,
professor of economics at the University of Denver
---------- Forwarded message ----------
Date: Sun, 21 Apr 2002 17:34:07 -0600
From: Tracy Mott
I think that this issue is very important one. I think that taxing
incomes does give a lot of ammunition to the tax cutters, flat taxers, etc.
I have thought that perhaps taxing wealth would be easier to justify as
representing an obligation on the part of the wealthy to pay for the
protection society gives to personal wealth and the aid it gives to creating
personal wealth, which is in large measure social wealth that is appropriated
by individuals in accordance with some rather arbitrary rules about how the
returns from using wealth to make more wealth are distributed and how wealth
transfers are governed. The ownership of wealth is the major source of
gaining more wealth, and the accumulation of wealth only may be the result of
hard work and more often than not is simply the result of prior ownership of
wealth. Taxing wealth is not taxing the income earned by those who do work
hard or are born with or acquire valuable skills; it is only taxing what they
have achieved to reduce the extra advantage to get future incomes or wealth
that they or their descendants will have. If someone supports a lot of
people out of his or her income or gives a lot of his or her income to worthy
causes or dissipates his or her income in "riotous living" or "conspicuous
consumption," he or she will automatically have less wealth to tax without
having to claim deductions, etc. Whatever incentive this might create
against saving as opposed to spending one's income I think would be small
because the desire to have wealth would outweigh the cost of the tax
payments, and high spending would keep employment, wages, and profits all
higher than they otherwise would be. Taxing wealth would generate the same
government revenue as income taxes with quite lower rates, and a flat
percentage tax rate on wealth would actually make the tax system a lot more
progressive in terms of incomes than it now is. And, if you wanted to exempt
owner-occupied housing or family farms from the wealth tax base (or leave
them for the local governments' sources of revenue) or grant businesses an
investment tax credit for plant and equipment spending to support increases
in productivity, you could do that.
So, I think this agrees with the arguments made by the reviewer of the
book mentioned below.
ANDERSON DAVID wrote:
> The Myth of Ownership': Challenging the Rhetoric of Tax Cutting
> By DAVID CAY JOHNSTON
> THE MYTH OF OWNERSHIP: Taxes and Justice.
> By Liam Murphy and Thomas Nagel.
> 228 pp. New York: Oxford University Press. $25.