Some millionaires are asking to be taxed more by letting the 2001 and 2003 tax cuts expire, and increasing rates across the board: from individual income tax to estate tax. Some say they should be paying more; others think it’s a badge of pride to owe so much back to this great country. I call it misguided patriotism.
Forcing patriotism, in this case in the form of higher taxation on others in your income bracket, because you think they should pay more, is not patriotic at all. To the 45 millionaires who want the tax to increase: why don’t you voluntarily donate your money to the IRS? Wouldn’t that make you all the more charitable and patriotic, in giving Uncle Sam a thank you, you pay extra to the IRS without the coercion? In fact, they have a contribution section that is specifically for reducing the debt. In 2005, only 48 taxpayers contributed, and from 1982 to 2005, only $9.8 million has been collected. And hey, the Treasury is taking online donations!
As we have seen in studies time and again, when you increase taxes, you increase government spending, creating problems not just for the rich, but for everyone:
Using standard statistical analyses that introduce variables to control for business-cycle fluctuations, wars and inflation, [Moore and Vedder] found that over the entire post World War II era through 2009 each dollar of new tax revenue was associated with $1.17 of new spending. Politicians spend the money as fast as it comes in—and a little bit more.
So much for deficit reduction. And for that matter, that’s no way to thank Uncle Sam.