In Friday's Wall Street Journal (p. A15 of the print edition), columnist Stephen Moore does his best to marginalize and discredit the growing chorus of high-wealth individuals, including members of UFE's Responsible Wealth project, who support raising taxes on wealthy people like themselves. But his best is little more than a collection of weak arguments and name-calling.
I wish I had a dollar for every time a wealthy liberal has declared he thinks he should pay more taxes. That list includes Warren Buffett, George Soros, Bill Gates Sr., Mark Zuckerberg and even Barack Obama, who now says that not only should rich people like him pay more taxes, they want to pay more. "I believe that most wealthy Americans would agree with me," he said of his tax-hike plan. "They want to give back to the country that's done so much for them."
The idea that the nation's primary wealth and job creators—i.e., the people who carry the bulk of the tax load—aren't doing enough for the country is a bit insulting. But the president is right that there is a seemingly endless number of terribly wealthy, guilt-ridden individuals who want Americans to pay more taxes.
Okay, let's get this much straight. It's not about "guilt." It's about "responsibility" and a deeper understanding of what makes wealth possible. Responsible Wealth members understand that their wealth is not in spite of, but because of our tax system and the investments its makes possible. Abigail Disney made this argument in a USA Today column last summer. Without a taxpayer funded interstate highway system, there would be no Disneyland. Without our courts, no copyright protection for Mickey Mouse. Without our publicly funded education system, no creative artists filling Disney Studios.
The simple fact is, the public investments made possible through our tax dollars are not the enemy of prosperity, but the foundation upon which economic prosperity is built. Bill Gates noted the taxpayer funded investments that led to the creation of the internet, without which, Microsoft would be a very different corporation today. Jerry Fiddler, whose Wind River Systems company made the embedded software for NASA's Mars Rovers, readily acknowledges the role taxpayer-funded investments played in his business success. Judy Pigott, whose family wealth comes from the manufacture of Peterbilt and Kenworth trucks, would be telling a very different story without the federally-funded interstate highway system. The list goes on.
Despite the assertions of Moore and others who hold his anti-government views, taxes raised to fund investments in the common good are not taken out of the economy, but rather moved from one part of the economy to anther to better meet our nation's priorities. Government expenditures, whether it is building a school, investing in high-speed rail, or aiding workers displaced by plant relocations, are just as much a part of the economy – stimulating economic growth and jobs – as a wealthy person deciding to buy a fourth home.
Government, as aptly described by President Abraham Lincoln, is simply a vehicle for doing things together that we cannot as easily do as individuals – whether that is pushing at the outer bounds of our shared knowledge through public research and exploration, leading our nation into a sustainable future through green energy and transportation investments, or sowing the seeds of prosperity for the next generation through a publicly-funded education system available to all, not just those who can afford it.
A clearer view of the symbiotic relationship between public investments and economic prosperity helps us understand how public investments yield so much more economic bang-for-the-buck than tax cuts. In a report from Moody's, Mark Zandi notes that each dollar the federal government gives away by making the Bush income tax cuts permanent yields about 29 cents in economic stimulus. By comparison, each dollar the federal government spends on infrastructure investments yields $1.59 in economic stimulus. Even more, each dollar of unemployment benefits yield $1.64 in economic stimulus, but that's another story (about the importance of a strong middle class to keep our economy going).
Moore spends most of his column though trying to make the weak argument that if these wealthy individuals want to pay more, they're nothing stopping them from writing a check to the IRS. Well, we've heard that one before... Just last month in fact from Sen. Orin Hatch. The short answer is that taxes are not charity. As former Supreme Court Justice Oliver Wendell Holmes once stated so eloquently, "Taxes are what we pay for civilized society." For the long answer, check out the post we wrote in response to Sen. Hatch's comment.