The Great American Tax Debate

The following is an excerpt from an article in:


The New York Times
Wednesday, September 19, 2012

The Great American Tax Debate

By EDUARDO PORTER

Come November, the economy — and who would be better to fix it — will probably be at the forefront of voters’ minds. But like pretty much every election of the last 60 years, voters’ choice will be colored by their views about taxes. If you believe the rich pay too little, chances are you will vote for Barack Obama. If you think tax rates on wealthy Americans are still too high, you will vote for Mitt Romney instead. Speaking to his donors at a fund-raiser, Mr. Romney argued he has no chance of gaining the vote of the nearly half of Americans who pay no federal income tax. But he probably has a good chance of capturing the vote of their fellow citizens who think paying no tax is unfair.

The great American tax debate may feel like a stale, perennial feature of our politics. But it is important. The controversy is not merely about how much we pay in taxes. An equally important question is about who pays them.

The liberal end of our political spectrum strongly believes that tax policy should aim to reduce inequities in pretax income. After all, a dollar taken from the rich to give to the poor should increase national welfare because the poor value that dollar more than the rich do. This would justify a progressive tax schedule — with tax rates rising sharply with income.

Conservatives, by contrast, scoff at the notion of income redistribution by the government. Many have long supported flat taxes — which take roughly the same share of the income, or the spending, of the rich and the poor.

The public shares this polarization. A growing share of Americans believes the rich pay too little in taxes. Many say our country would be fairer if those earning more than $250,000 paid more. A CNN/ORC International poll in April found that seven in 10 Americans support the Obama administration’s proposal that people making $1 million a year or more pay at least 30 percent of their income in taxes.

Still, many shrink from raising taxes on the wealthy. A McClatchy/Marist poll in July found that more than half of Americans want all the tax cuts passed in the Bush administration to be extended, including those for the richest Americans. What’s more, a quarter of Americans believe the poor don’t pay enough, the highest share since Gallup started asking the question a decade ago.

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