During the protracted debate over the extension of the “Bush tax cuts,” much of the angst of President Obama and his fellow Democrats has been centered around increasing taxes on “the rich.” “Rich,” for purposes of this debate, has been defined by the president as individuals making more than $200,000 per year and families earning more than $250,000.
The president and his allies are bound and determined to have these higher-income folks pay more taxes. Never mind that much of this income is actually small-business income being passed through to individual tax returns through partnerships, limited liability companies and S corporations. Never mind that often, after paying taxes, those small-business owners are dipping further into their own pockets to finance growth, support inventory increases or provide more working capital for expansion. Never mind that if you are interested in creating jobs - and good-paying jobs - these are exactly the people with whom we must leave some money so they can hire others, since someone making $50,000 is unlikely to hire a new employee at $60,000. Never mind that according to the Congressional Joint Committee on Taxation, the top 1 percent of taxpayers now pay 40.4 percent of all income taxes, which is the highest level since they started measuring this in 1986. Never mind that the bottom half of taxpayers only pay 2.9 percent of all taxes, which is the lowest on record.
But I digress. In the president’s immense disdain for people whose accomplishment, creativity, risk taking, talent, inventiveness or success has given them financial rewards, he is bound and determined to punish them, in spite of no economic evidence that this will grow jobs, the economy or lower the deficit.
OK. He’s wrong, but let’s accept that this is where he and congressional Democrats stand. Unfortunately, though, they have allies. Allies among the wealthy. Warren Buffett, for one, was recently quoted as saying he “should be paying a lot more in taxes.” In the past Barbara Streisand, Bill Gates and others have joined this chorus.
Mr. Buffett, et al., I have good news for you. You need not wait for Congress to pass a massive tax increase to pay more taxes. You can do it yourself without compelling by legislative fiat others to contribute to your cause. You need not force the rest of us by law to do what you want to do. Instead, you can lead by example.
Since I came to Congress, I have been the author of the “Put Your Money Where Your Mouth Is Act.” This simple bill would add a line near the bottom of Page 2 of all Form 1040 tax returns, allowing any taxpayer to voluntarily and very easily pay more tax than the law requires. What a great idea, huh? No more guilt. Just a simple way to pay whatever you want. Heck, we could even amend it to have a table to compute the tax for you in case you want to pay 50 percent, 60 percent or even 70 percent. Then just add it to the tax due by law and, voila, you are doing what you want to do without burdening the rest of us.
This bill will clearly cost nothing, but will raise revenue by the amount of voluntary taxes paid. So it will reduce the deficit by the amount that all of those who support higher taxes pay as they lead by example. Or they could always choose not to deduct those charitable contributions they are making to the causes in which they believe, instead letting we, the good folks on Capitol Hill, direct their money.
This is not an entirely novel idea. It has been tried on several state tax returns, including Oklahoma and Massachusetts. And it raised literally hundreds of dollars in each of those cases, because so many people in favor of tax increases agreed to show the rest of us the way. In fact, I think the total may have been a few thousand dollars somewhere.
All kidding aside, we should pass this bill and put this line on tax returns. Let those who say they pay too little in taxes either put their money where their mouths are or put their mouths back in the closet where they are keeping their money.
Rep. John Campbell is a Republican member of the U.S. House of Representatives from California.