The United States House of Representatives recently rejected a constitutional amendment that would have required all future revenue increases to be passed by a two-thirds supermajority of both the House and the Senate. Since few, if any, revenue increases ever pass by a two-thirds majority due to their unpopularity, the amendment would effectively forbid Congress from closing tax loopholes or raising tax rates in the future. Although the amendment failed, a majority in Congress supported it; the final vote was 232-189, short of the two-thirds majority required to amend the Constitution. Given the high degree of support, it stands to reason a measure like this will come before the House again; that support, along with the news that Republicans in Congress plan to pass a massive tax cut that will likely be weighted more toward the wealthiest taxpayers, tells me that we need to have an informed discussion of the nature and function of the federal tax system.
To lay my cards out on the table, I believe in a progressive, redistributive tax system. By progressive I mean a system in which wealthier citizens pay a greater share of their wealth in taxes, and by redistributive I mean a system in which those tax revenues are then used to improve the resources of poor and middle-class citizens, either by directly returning to them in the form of tax credits and rebates or by providing services that they would otherwise be unable to afford. Our current system imperfectly reflects these priorities, as progressivity and redistribution seem unfair to many Americans who therefore exert political pressure to keep rates low and open loopholes; a significant minority wish to impose a flat tax or eliminate most income taxes altogether. At first glance, they have a compelling argument; America is a capitalist society, built upon the notion of individual competition and achievement. Perhaps more importantly, we have enshrined respect for private property and transformed it into a fundamental right, conferred by human nature. Given these principles, why should citizens not be entitled to keep what they earn? Read the remainder of this entry »