Tax Deal Ethics

A few brief ethics observations on the current tax deal machinations on Capitol Hill:

  • It was an unconscionable breach of responsibility for Congress to neglect to address this issue months ago. Not only would a timely decision whether to extend all, part or none of the Bush tax cuts have avoided the present uncertainty; it would have aided the recovery, as businesses and individuals would have known what the tax requirements would be, and could invest, spend or hire accordingly. The reason the Democrats waited, even when it was obvious that their House majority was a goner and that President Obama would be negotiating from weakness as a result, was pure, unadulterated cowardice. Congress was willing to withhold needed policy certainty, harming the economy and the public, so they wouldn’t have to take a stand before elections.
  • The tax compromise itself was unethical. In a setting where the U.S. public had made clear it believes that the government’s deficits are too large, and that reducing the gap between revenue and expenditures is critical to the health of the nation, both Republican leaders and President Obama negotiated a deal that avoided an opportunity to significantly increase  tax revenue by letting the Bush tax cuts expire and increased unfunded expenditures. This was per se irresponsible, on both sides.
  • The Democratic talking point that allowing tax rates that have been in place for a decade to continue is a tax cut is intentionally misleading, whether one favors the compromise or not. The terminology is indefensible and almost Orwellian. A rate that stays the same is not a cut, even if it was once a cut. If the Supreme Court declines to over-rule Roe v. Wade, one cannot honestly say that it just made abortion a right, when abortion has been a right for over 30 years.
  • The presumption that large estate taxes are fair is unwarranted, and never challenged sufficiently by the media. Estate taxes, or “the death tax,” may well have to be raised because of the financial mess the country is in. But to suggest, as Sen. Bernie Sanders did in his personal filibuster and Democrats like Sen. Shumer and Rep. Nadler are now, that it is unethical to allow families to keep their estates without massive government confiscation is just bizarre. The money has been taxed once already. Parents who save and build fortunes to ensure that their children and grandchildren are financially secure should be encouraged to do so, not condemned for it. The chief (and flawed) argument for the Dream Act is that children should not be “punished’ for the crimes of their parents, though it is not punishment to take away something that neither the child nor the parent ever possessed legally. Still, most of those making this claim are eager to punish both dead parents and their living children, legal citizens all,  for the “crime” of working hard, being successful, investing well, and acquiring an estate to pass on to the next generation. Again: such taxes may be unavoidable at this point as the worst of many unpleasant options. There is nothing ethical about it, however.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.