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Posts Tagged ‘tax fairness

Four GOP Presidential Icons on Tax Fairness and Values

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Three Republican Presidential Icons Who Advocated Tax Fairness

Bruce Bartlett, in the Fiscal Times, makes a really good argument for raising taxes on the wealthy, especially on those who receive capital gains, dividend, and inheritance tax breaks.

What is novel about Bartlett’s argument is that he uses four Republican Presidential icons to make his case.

At least through the 1980s, special tax breaks, such as those for dividends and capital gains, were viewed as unfair and unjustified. Indeed, Ronald Reagan was among those who decried the capital gains break because it meant that rich people, who get most of their income from capital, paid less taxes than the average working man. Consequently, as part of the Tax Reform Act of 1986, he agreed that income from capital gains and wages ought to be taxed at the same rate.

Reagan was building on long tradition by Republicans of demanding fairness in the tax code, which, among other things, meant making sure that capital and labor were treated equally. For example, in his first State of the Union Address in 1861, Abraham Lincoln said, “Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”

In 1910, Theodore Roosevelt excoriated big corporations and wealthy men for rigging the system in their favor and not paying their fair share of taxes.

    The true friend of property, the true conservative, is he who insists that property shall be the servant and not the master of the commonwealth; who insists that the creature of man’s making shall be the servant and not the master of the man who made it. The citizens of the United States must effectively control the mighty commercial forces which they have themselves called into being….

    We grudge no man a fortune in civil life if it is honorably obtained and well used. It is not even enough that it should have gained without doing damage to the community. We should permit it to be gained only so long as the gaining represents benefit to the community. This, I know, implies a policy of a far more active governmental interference with social and economic conditions in this country than we have yet had, but I think we have got to face the fact that such an increase in governmental control is now necessary.

    No man should receive a dollar unless that dollar has been fairly earned. Every dollar received should represent a dollar’s worth of service rendered – not gambling in stocks, but service rendered. The really big fortune, the swollen fortune, by the mere fact of its size acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes, and in another tax which is far more easily collected and far more effective – a graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate.

In 1954, Dwight Eisenhower said that everybody should pay their fair share and denounced unjustified tax cuts. “An unwise tax cutter, my fellow citizens, is no real friend of the taxpayer,” he said.

In short, the real debate on the Buffett rule is about fairness. Its particulars are less important – especially since it has no chance of passage at this time – than the debate that will accompany it. If Republicans are successful in conveying the message that it’s okay for rich people to pay less than working people then this will frame the forthcoming budget debate in a particular way….

If history proved any answers, the one answered by these four Republican presidents is that labor should be taxed at the same or lesser rate than capital gains and inheritance because labor is inherently worth more to society.

Something to think about as discussions on taxes and tax rates continue throughout the year.

Related:

Have the Rich Ever Paid a Fair Share of Taxes? (Part 1)

Have the Rich Ever Paid a Fair Share of Taxes? (Part 2)

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Written by Valerie Curl

April 20, 2012 at 10:35 AM

Reagan: Should the Wealthy Pay Less In Taxes Than a Bus Driver?

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I came across this video comparing President Obama’s speech on asking the wealthy to pay as much or more in taxes than the middle class. Here is that video.

Watching that video caused to me to wonder about the entire Reagan speech. Since videos are easy to edit, I wanted to watch the entire Reagan video. On June 6, 1985, President Reagan went to Atlanta,Georgia, to speak to the Northside High School student body. While the entire video, from the Reagan Library files, is worth watching for his remarks on the importance of education and the public school system, his comments on the tax system come just after 9 minutes into the video. Watch it.

So, my questions are: was Reagan engaging in Class Warfare when he asked those students if a wealthy person should pay less in taxes than a bus driver or was he simply stating facts on the ground? If not, then how can President Obama now be described as engaging in Class Warfare if President Reagan was not, since they have both advocated a similar tax policy and for the same reasons?

I don’t believe in taxing the rich into oblivion or in destroying private industry. Being able to create wealth through innovation and private business creation led this nation to economic greatness…and the dream of that opportunity drew immigrants from around the world who created other new businesses and other new innovations. The United States, historically, has been the most innovative country in the world because we invited immigrants and opened the doors of opportunity, education and success to all her citizens unlike the old feudal, class systems of Europe and elsewhere in the world.

But as Reagan said, wealth – or materialism – for its own sake should never be an admired goal. If accumulation of wealth is used only for self-aggrandizement, that person has morally failed. And every person who has succeeded so greatly owes their achievement to the opportunities only provided by this great nation – as a result everyone, regardless of wealth, owes a payback to the nation and all her people.

The progressive tax system was originally set up to be morally equitable. The richest families were taxed more because they could afford to pay more without harming the health and welfare of their families. The poorest paid less because any more would harm their ability to care for their families. It was designed to follow moral, Christian values.

Reagan emphasized these same moral values when he spoke to the Northside High School student body. He emphasized a kind of fairness, equity, and compassion lost in the current debate.

As John D. Rockefeller told his children more than a century ago, “to those who have been given so much so much is owed.” That statement is a moral value worth remembering when listening to the tax debates going forward.

Written by Valerie Curl

October 4, 2011 at 9:45 AM

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