Yesterday, United States Senator Barbara Boxer, D-California, said in her speech that, ‘Since 1985, the wealthiest 400 Americans have seen their taxes fall by 40%, while their average incomes quadrupled.’ This statement suggests that Senator Boxer is not only concerned about the middle class and the poor, but also that a certain very small section of Americans are extremely wealthy. In this speech, she 1) ignores the possibility that the wealthy Americans’ lower tax percentage partly caused their incomes to quadruple, 2) dismisses that tax revenue is increased when revenue quadruples and taxes are reduced by 40% (as long as the current tax rate for the average top 400 Americans is above 15%), and 3) implicitly rejects the free market implications of people who produce four times as many dollars as they did twenty-six years ago.
First, Boxer’s statement is meant to produce a feeling that this the two facts reinforce the repugnance of each other. These rich people—they got their tax rates lowered, contributing less to society, plus they were getting richer anyway! How unfair! However, we should consider whether the lower taxes allowed them to produce higher incomes.
Second, as long as the current rate for these wealthy people is above 15% now, we have increased revenue from these Americans. There is more money available to give to the poor, give to the middle class, give tax breaks to small businesses, throw down the environmental-energy drain, etc. One is not a good Senator when one complains about increased revenue. Perhaps if Senator Boxer realized the common sense understanding that, when people have more money at their disposal, they can create more wealth, she would not see these facts as conflicting but see the lower taxes as wealth-producing—and tax-revenue-producing.
Third, she does not fully grasp the capitalistic system. When people interact economically in a system of free (or freeish) trade, resources are used more efficiently. The traders are mutually benefited. The ability of these richest 400 Americans to quadruple their wealth is a sign that they are producing wealth, and this does not simply mean that are bringing in more income; their extra cash is a sign that they are producing marketable, useful goods and services. They are creating wealth for themselves and for others.
These three things suggest that Barbara Boxer is anti-wealth and anti-tax-revenue, regardless of whether she realizes it. Perhaps she stands against people becoming ‘too’ wealthy because she believes that one man cannot get rich except by taking that money from the poor man, but we know that’s not true.
