Taxes for raising revenue, not punishing rich

Taxes are how we raise the money needed to run government. The rich have the wherewithal to bear most of those costs. These points are especially connected at a time when the rich have gotten so much richer and the government needs to do so much more.

But in making the case to raise taxes on the wealthy, it is counterproductive to portray such a scenario as a kind of just punishment for those who have accumulated wealth. Many on the left can’t stop themselves from hurting their cause.

It’s true that America’s billionaires added $1 trillion to their pile during President Donald Trump’s four years. But though the 2017 tax cuts mostly benefited the richest investors, a growing concentration of wealth has been going on for decades. So, raise taxes on these guys because they have the money and not because they are supposedly greedy or otherwise in need of moral teachings.

The pandemic did especially nice things for Silicon Valley companies that helped stay-at-home Americans move their shopping and working online. They didn’t create the pandemic. They just happened to be in the right businesses when it hit.

Thus, there was no good reason for the Institute for Policy Studies and others to fulminate against “pandemic profiteers,” a list heavy with tech entrepreneurs. The dictionary defines profiteer as one who makes “an excessive or unfair profit, especially illegally or in a black market.”

What exactly made Zoom founder Eric Yuan one of the pandemic profiteers? Yuan had no idea when he created his videoconferencing service in 2011 that nine years later, economic shutdowns and social distancing would create a huge market for his invention and make him a billionaire several times over.

Liberals should bear in mind that many of the biggest donors to President Joe Biden’s presidential campaign are the very billionaires on whom he wants to raise taxes. They include the top people at the likes of Facebook, Google and Apple. One of them, Google CEO Eric Schmidt, saw his net worth, now $17.4 billion, rise 61% in the Trump years.

Also note that several factors influence rich people’s view of taxes. Some feel morally obligated to help support the society that has done so much for them. Others consider it very much in their interests to have good roads, ports and internet – things their taxes pay for.

The “fairness” argument does remain valid. The wealthiest Americans have received enormous tax breaks while having the ability, in many cases, to set their own number for taxable income. By contrast, the working stiffs see their taxes automatically deducted every week from their paychecks.

That makes Biden’s plan to beef up the IRS to go after tycoons who chisel on their taxes long overdue. IRS Commissioner Charles Rettig has said that tax cheats deprive the government of something like $1 trillion a year.

Just don’t blame the honest economic winners in the pandemic for the hardships of others. New York State Sen. Luis Sepulveda, who represents a working-class area of the Bronx, implied as much when he said, “It makes me angry because in the wealthiest city in the world, it’s inexcusable to have such a high rate of unemployment in one area.”

His largely immigrant constituents did not lose their service jobs because rich people lived elsewhere in the city. They lost them because a deadly virus shut down the businesses that employed them.

So, there’s no need here to spin a morality tale about the evils of great wealth. The case for raising taxes on those who could most easily pay them is good. Let’s stick to this more sophisticated argument and skip the reproach.