Sorry Sen. Hatch... Taxes Are Not Charity

Senator Orin Hatch (R-UT) just doesn’t get it – taxes are not charity. His idea that rich people who recognize that their taxes must go up should "write a check to the IRS” is just plain nonsense… nonsense that we’ve heard before.

Eric Shoenberg, a member of our Responsible Wealth project, was quoted in an AP article this weekend. As a high-income American benefitting from the preferential treatment of income from wealth, Schoenberg recognizes that his taxes are absurdly low. Schoenberg, as part of the Tax Wealth Like Work campaign, called for Congress to raise his taxes and that of other high-wealth Americans to restore fairness to our tax system and avert damaging budget cuts. Senator Hatch was quoted in the same article with a much dumber idea:

Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee, said he has a solution for rich people who want to pay more in taxes: Write a check to the IRS. There's nothing stopping you.

"There's still time before the filing deadline for them to give Uncle Sam some more money," Hatch said.

Schoenberg said Hatch's suggestion misses the point.

"This voluntary idea clearly represents a mindset that basically pretends there's no such things as collective goods that we produce," Schoenberg said. "Are you going to let people volunteer to build the road system? Are you going to let them volunteer to pay for education?"

Schoenberg’s response hit the nail right on the head. But this isn’t the first time we’ve heard this argument. It came up last year when our 2010 Tax Fairness Pledge garnered national attention. Back then, after columnist Dana Milbank of the Washington Post made a comment to the same effect, The Economist fired back with a great rebuttal.

…Here's the thing: taxes are not charity. It would be a bad idea for wealthy people who feel they should be paying more taxes to instead contribute large amounts of money voluntarily to reduce the national debt. The first, less important reason for this is that any individual's contributions would be meaninglessly small; they can make far more difference by using the same amount of money to advocate for higher taxes, as these millionaires are doing. But the second, more important reason is that even if a million millionaires got together and voluntarily donated money in such quantities that it made a measurable dent in the deficit, it would be even worse, because they would be giving license to other people to continue pay less than their fair share of taxes. It's an invitation to free-riding, with the public-minded rich subsidizing the irresponsible and selfish.

…even if America had a balanced budget, this kind of argument would be illegitimate. At a pragmatic level, you can't run government functions on voluntary donations because voluntary donations aren't sustainable. You can't count on them. …strong modern states need to be able to tax their populations to pay for public goods.

At a more principled level, this kind of argument is asocial and irresponsible. It's the argument of a free-rider. …Government spending is collective spending, and the taxes we pay for it are collective taxes. Like it or not, this is collective action, and the arguments we have about it have to be collective as well…

Click here to read the full response to this argument from The Economist. Now, if only we could get Sen. Hatch to read it.


Showing 44 reactions

Please check your e-mail for a link to activate your account.

Boston

184 High St., Suite 603
Boston, MA 02110
(617) 423-2148

Durham

711 Mason Road
Durham, NC 27712

We gather as guests on Indigenous land

Created with NationBuilder