I take strong exception to Dan Rodricks' Dec. 2 column regarding "indefensible tax cuts" ("Tea party and GOP: Defending indefensible tax cuts". His anger over income disparity and wealth accumulation is not founded in fact. When we subsidize the poor, we get more poor people. We will never raise up the poor by penalizing the successful. We should celebrate those who have been successful — not demonize them. Most of them got there through education, hard work and risk-taking. They are also the ones who are supporting our charities because the rest of us can't afford it. I find that admirable, and we should hold them up as examples to our youth.
Let's review the facts please:
• There are no tax cuts being proposed — instead we all face enormous tax increases as a result of the expiration of the current tax law.
• Our country's tax burden is already being carried by top earners. IRS statistics show that in 2008 the top 3.1 percent of earners (those with gross income of $200,000 or more) paid 52 percent of all personal income taxes. This is a higher percentage than in 2001. Many of these people are entrepreneurs, and most of them are investors in small companies through venture capital, private equity funds and small cap stock funds.
• The bottom 63.7 percent of earners in 2008 (those with gross income of $50,000 or less) paid only 7.6 percent of all personal income taxes. (These stats are available on http://www.irs.gov.)
• A huge number of tax filers pay nothing, zero, zip. And many of those actually get money from the IRS, having paid nothing — the so-called "earned income credit."
• Small businesses account for an estimated 80 percent of all new jobs, and 75 percent of them are "pass-through entities" filing and paying taxes as individuals. Taxing them more when we face persistent unemployment is not logical and is a self-defeating strategy.
• We have a spending problem, not a tax problem. Our government spending is now 25 percent of GDP, up from less than 20 percent 10 years ago.
• Look at many of the EU countries if you want to see what happens if we continue this trend. Or, how about California?
So, the obvious conclusion is we already depend too much on the "wealthy" to pay for our bloated government, and much of our society is getting a free ride. Taxing the "wealthy" more and taking 55 percent of their estates and family businesses at death is a self-defeating course of action. What is the solution?
• Like Ronald Reagan said, "government is not the solution — government is the problem." We should be making drastic cuts in most federal agencies, departments and programs and eliminate some entirely, especially those established in recent decades that have not produced results originally intended — Energy and Education are examples.
• Stop creating more new government agencies, programs and commissions. We can't afford them. Despite what we were told, the new health care law will cost us billions or trillions more over the next couple decades.
• Eliminate the defined benefit retirement plan for federal employees like the private sector did a decade or more ago. It is simply not a sustainable business/investment model. Replace it with a 401(k) type of plan like the private sector did.
• While it does seem that making cuts to Social Security growth is necessary, Congress should lead by example and trim the salaries and the health and retirement benefits they have awarded themselves, "Cadillac" plans compared to what the rest of us mortals have. There is no Social Security COLA increase for the second year in a row, but Congress just got a pay raise. Our leaders should lead by example, not rip us off.
We would be well-advised to remember the following Thomas Jefferson quotes:
• "The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."
• "Most bad government has grown out of too much government."
• "I think myself that we have more machinery of government than is necessary, too many parasites living on the labor of the industrious."
• "Government big enough to supply everything you need is big enough to take everything you have. The course of history shows that as a government grows, liberty decreases."
The tea party has done us a favor by reminding us that the Constitution should be our governing document, guide our political decision making, and limit government's intrusion into the rights reserved to the people and the states.
J. Richard Uhlig, Towson