Wealth, Equality and Taxes
Budget time is upon us once again. In both Washington, D.C. and Indianapolis, our legislatures are working to set government spending. In Indiana, our past budgeting process worked well with Indiana enjoying one of the only budgetary surpluses in the country. The same cannot be said about our government in Washington, where it has been many years since the House and Senate have been able to pass a budget resolution. As a result, our federal government is running stunning deficits and amassing staggering debt.
During the budgeting process, the question always arises: wouldn't it just be easier to raise taxes on the wealthy? Often times, the argument is put forth that the wealthy need to pay more in taxes, more of their ‘fair share.’ After all, by definition, the wealthy have more money than others. Can’t they simply have their taxes raised and make all our government’s budget woes disappear?
The issue of wealth and taxation in a free society like ours is an interesting one, and one that needs to be considered at more than the surface level. First of all, we must realize that in a free society, we will most certainly have varying levels of wealth. Indeed, as Lawrence Reed of the Foundation for Economic Education once put it, “free people are not equal and equal people are not free.”
If you gave everyone in House District 64 $1,000 to spend, in days few people would still have that money. Some would have turned a profit by investing it, ending up with more than $1,000. Others would have given a large portion of it away or paid off debt. A few would have wasted it. The truth is, any of these options are acceptable in a free society. We all make choices about what we value. The point is recognizing that someone has wealth does not tell the whole story.
Second, I must note that having wealth should not be viewed as being morally suspect. In other words, wealth is not a fixed pie - if someone gets a large piece of it, that does not mean someone else is left with a smaller piece. Remember, just a few decades ago a color TV was a real luxury – now it is common place. Put another way, one person obtaining wealth does not cause another person to lose money or to go without.
Finally, in considering wealth, we must realize that many innovations come from the private sector and from capital gained to fund research and develop projects. The future sustainability of private sector companies hinges on continually being innovative. Pioneers and inventors in business enterprise and emerging markets like former CEO of Apple, Steve Jobs, or Richard Branson, founder of Virgin Group, inspired the world with their creations and spurred the continued advancement of society.
All of these companies were start-ups with big dreams that weren't stifled by government overreach and burdensome tax regulations. The government taking more money from business owners and innovators hurts our economic progress and kills potential job opportunities. In fact, many have argued that by increasing taxes on the wealthy, the result will actually be a decrease in tax revenue as new companies and their jobs simply fail to come into existence.
It is, of course, politically expedient to call for higher taxes on a minority of people in order to pay for the excesses of government. After all, it is always easier to live within your means if you can simply increase your income. But, in a free society, we must place a value on the fact that some people are able to produce wealth and retain it. For without it, the inventions and innovations that have made life better for all of us would have never been. It is time to continue, as we have been able to in Indiana, with prudent budgets that balance income with expenses –without raising taxes.
State Rep. Tom Washburne serves as Vice Chairman of the Judiciary Committee. He also serves on the Financial Institutions Committee and the Select Committee on Government Reduction. Rep. Washburne represents the entirety of Gibson County and portions of ¬Knox, Pike, Vanderburgh and Posey counties.