Political gold, fiscal bankruptcy

Throughout the debt crisis debate, President Obama has clung to a tried-and-true political slogan of the left: The rich can do more. He has insisted on what he calls a “balanced approach,” which in fact is a proposal to raise taxes only on the rich while leaving the rest of the population’s tax rates untouched.

A substantial number of House Republicans have proven that they have the political will to oppose such a tax increase. What they have not proven, though, is their ability to articulate to the American people why raising taxes on the rich is such a bad idea.

To many Americans, the notion that we can help pay down our debt by asking the rich to pay more does not sound all that unreasonable — after all, the rich can afford to do so. The tax-the-rich solution sounds even more plausible given most Americans’ unfamiliarity with the tax code. President Obama and his Democrat colleagues have shown no hesitation in capitalizing on this unfamiliarity, suggesting that the rich do not pay their fair share when in fact they already give up a higher percentage of their incomes than the rest of the population.

The Republican counterargument thus far has been that raising taxes on the rich will hinder economic growth by taking more money away from those who are in the best position to create jobs. This is likely true. Yet there is a more fundamental argument to be made for why raising taxes on the rich is a cause of — not a solution to — America’s debt problems.

A system that allows politicians to target one small portion of the population for tax hikes is an inherently dangerous one. In addition to fostering class conflict, the ability to raise taxes only on the rich when the government has trouble paying its bills strips the system of the discipline necessary to achieve a balanced budget. For those politicians who are willing to use it, “the rich can do more” mantra is political gold. It allows them to garner favor from a majority of the electorate by promising ever-increasing government benefits while assuring people that the excess costs will be covered only by the small minority of “those who can pay more.” At the same time, such policy is a prescription for spiraling government debt, for the average American has less reason to oppose wasteful spending when someone else is asked to bear the extra burden.

Taxpayers’ unwillingness to lose more of their money is the ultimate check on excessive government spending. The electorate will oppose further government spending when the hit to their pocketbooks, in the form of tax hikes, exceeds the benefit they will receive from such spending. However, when revenues can be raised by targeting a small minority of the voting population, leaving the majority untouched, the systematic check on spending is avoided. It is essentially all gain, no pain for the majority. This is not to suggest that raising everyone’s taxes is the solution to the debt problem. Rather, it is an argument for recognizing the crucial role aversion to higher taxes must play in curbing spending and managing the federal budget.

In the interest of reinstituting fiscal discipline, Republicans must continue to oppose the funding of wasteful government spending through tax increases that target only a small portion of the population. But more importantly, they must articulate to the American people why targeting the rich is such a dangerous practice. As President Obama continues to appeal to the majority’s immediate personal interests, Republicans must appeal to reason and the long-term common good.