“The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities.”
― Adam Smith
So said the the man who wrote “The Wealth of Nations”, often thought of as the father of capitalism, often cited by conservatives calling for a laissez faire (hands-off) system of government, where the government should intervene as little as possible in the economic affairs of businesses and individuals (and with little or no taxation.)
Let me rephrase the quote: “Citizens should be taxed as a percentage of their income according to their wealth in order to support the government’s programs that benefit everyone – the more you have, the more you should pay.”
Sounds downright communist, doesn’t it? It also sounds quite scriptural : “From everyone who has been given much, much will be demanded.” (Luke 12:48)
It would seem the wealthy in America overlook that part of Smith’s philosophy (and what Jesus says) and find new ways to avoid paying their fair share of taxes.
In a Fresno Bee opinion column by staff writer Dan Walters (25 July 2016), entitled, “Will rich finally exit state?”, he opined if Californians pass Proposition 55 this November, which will extend the temporary surtax on the highest state tax-bracket, will the truly wealthy (the one-percenters) who currently pay one-half of all income taxes (and about a third of the state’s general fund income) finally say enough of this (and move to another state that doesn’t tax income?) He concluded with, “It’s a question that no one can answer – yet.”
Come November we’ll know both answers to the questions of whether the rich will be asked to continue to pay their proportionate fair share or will they run away to avoid what they believe is unfair.
Fair is a matter of perspective, but let’s compare places to live and their taxes.
California’s top marginal income tax rate was 39.6% last year.
In the Scandinavian countries of Norway, Sweden and Denmark (for example, and way below France who has the highest), the effective highest individual tax rate is, on average, 50%.
And what does that extra 10% Scandinavians pay get them? Superb infrastrucure (roads, bridges and the like), excellent education, universal health care and more. For the 10% less that Californians pay? A crumbling infrastructure, mediocre education, the most expensive healthcare in the nation, and far less in every other category.
“Tax is not a four-letter word; rather, it’s the price we pay for the country we want.”
― Alex Himelfarb
The real question that needs to be asked by Californians (and by extention, America) is, “What do we really want? To be first-rate or just so-so?”
I have, and I’m willing to continue to, pay my fair share to have the best.