In a column last week, I reported on the D.C.-based Tax Foundation’s study estimating 44 percent of income earners will legally have no 2004 federal income tax liability.
The study concluded, “When all of the dependents of these income-producing households are counted, there are roughly 122 million Americans — 44 percent of the U.S. population — outside of the federal income tax system.”
The Bush administration sees as desirable removal of the income tax burden on Americans at the lower end of the earnings spectrum — families earning less than $50,000 a year. When President Reagan successfully got Congress to remove 6 million Americans from the tax rolls, he described his tax reform initiative as one of his administration’s proudest achievements. At the time, I argued doing so was nothing to be proud about, and I extend that same criticism to President Bush.
You might ask, “Why?” In general, I’ve always held a tax cut for anybody, at any time, for any reason is good because it keeps more of our earnings in our pockets and out of Washington. But there’s a problem. Removing so many Americans from federal income tax liability contributes to the political problem we’re witnessing this election: class warfare and the politics of envy.
When 122 million Americans are outside of the federal income tax system, it’s like throwing chum to our political sharks. These Americans become a natural spending constituency for big-government politicians. After all, if you have no income tax liability, how much do you care about how much Congress spends and the level of taxation? Political calls for tax cuts fall upon deaf ears. Survey polls reveal this. According to a Harris Poll in June 2003, 51 percent of Democrats thought the tax cuts enacted by Congress were a bad thing, while 16 percent of Republicans thought so. Among Democrats, 67 percent thought the tax cuts unfair, while 32 percent of Republicans thought so. When asked if the $350 billion tax-cut package will help your family finances, 59 percent of those surveyed said no and 35 percent yes. Tax cuts to many Americans mean one thing: They threaten handouts they receive.
There might be a correction for the political problems caused by large numbers of Americans with zero income-tax liability. But it might be politically incorrect to even mention it.
I do not own stock, and hence have no financial stake, in Ford Motor Co. Do you think I should have voting rights, or any say-so, in the company? I’m guessing your answer is no.
So here’s my idea. Every American regardless of any other consideration should have one vote in any federal election. Then, every American should get one additional vote for every $10,000 he pays in federal income tax. With such a system, there would be a modicum of linkage between one’s financial stake in our country and his decisionmaking capacity.
This is not a far-out idea. The Founders of our country worried about it. James Madison’s concern about class warfare between the rich and the poor led him to favor electing the House of Representatives by the people at large and the Senate by property owners. He said, “It is nevertheless certain, that there are various ways in which the rich may oppress the poor; in which property may oppress liberty; and that the world is filled with examples. It is necessary that the poor should have a defense against the danger. On the other hand, the danger to the holders of property cannot be disguised, if they be undefended against a majority without property.”
Walter E. Williams is a nationally syndicated columnist.