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Tax Reform for Progressives

01 May 2018

Doug Bandow

Tragic are the moral dilemmas facing liberals. They believe in a
redistributionist, socialist state. But they don’t want to
live with the consequences of a redistributionist, socialist state.
What is a good progressive to do?

They can write “The
Ethicist
” in the New York Times
Magazine. Kwame Anthony Appiah is kind of Ann Landers for
the postmodern world. One conflicted liberal recently wrote in
— anonymously, of course — noting that the
person’s son was in private Montessori school, “but I
can’t afford to keep him there when he starts
kindergarten.”

Like any good progressive this person believes “that free
public education is an important aspect of our society,” but
the local public schools just aren’t, well, the best for the
writer’s son. However, there’s a state voucher program.
As one would expect, the decent liberal parent is convinced
“that taxpayer dollars would be better spent to fortify
public-school systems and should not be funneled to private
schools.” But this is the person’s son! So would it be
okay to apply for the voucher?

A second writer, whose name also was withheld, worried about the
appropriateness of taking a tax break through a 529 educational
account. After all, this person also claimed to be “a big
supporter of public education.” Would it be okay to use the
deduction?

It’s time for tax reform
directed at Liberals/Progressives and especially Socialists to
ensure that they pay all they pay, and even more.

The Ethicist said of course! As we know, being a progressive
means having no responsibilities, no limits, no obligations. Most
important is to feel good about oneself. Never mind the principles
being sacrificed!

One’s kids come first. Indeed, explained Mr. Appiah,
“you should take all the tax deductions you’re legally
entitled to.” Just because you purport to be a liberal
dedicated to the expansive, redistributionist state doesn’t
mean you have to behave like one. Said the Ethicist: “you
don’t have a duty to pay more than you are required to by law
just because you and people like you are benefiting from bad
policies.”

Obviously, the choices available in a free society are
preventing progressives from living their lives according to
Left-wing scripture. So friends of freedom should get behind tax
reform to help prevent liberals from backsliding and acting like
greedy conservatives, thereby denying Uncle Sam needed revenue that
should be treated as his in the first place. Then Washington could,
in its beneficence, decide how much the rest of us get to use for
our own selfish purposes.

In fact, liberals need a special tax code. That would require
expanding the 1040 a bit. But doing so should bring in substantial
revenue. And, more important, the new rules would redeem the lives
of fallen progressives. No longer would they need to write to The
Ethicist seeking absolution for decidedly unliberal behavior.

First, under filing status, add Liberal/Progressive and
Socialist. That designation would determine tax rates and
eligibility for tax “loopholes,” as well as special
duties not applicable to other, less enlightened taxpayers.

Next add language to exemptions indicating that Ls/Ps are not
entitled to any write-off. Ss receive a negative exemption for
every dependent, which means adding to their taxable
income.

Line 7 for wages would be expanded. Those checking L/P would add
a 25 percent surcharge. S’s would include a 50 percent boost.
S’s with three homes, think Bernie Sanders, would get their
own special levy, and all the pleasure that comes from adding 100
percent extra income.

Line 8b, for tax-exempt interest, should be revised to make all
interest taxable for Liberals/Progressives and Socialists. 9b for
qualified dividends would treat dividends as ordinary for tax
purposes. Business income, line 12, would include the same
surcharges as for wages. Any business loss would be treated as zero
for Ls/Ps and Ss. What good socialist tries to earn a
profit?

Capital gains, at line 13, would be subject to normal income tax
rates for Ls/Ps and Ss. On line 15a, IRA distributions would be
doubled for Liberals/Progressives and trebled for Socialists. The
same for pensions and annuities on line 16a. These private
retirement incomes properly belong to government. In a perfect
Bernie world, they would be seized for redistribution for those
without private benefits.

Rental real estate, on line 17, is evidence of capitalist
oppression. Any such income would be doubled for Ls/Ps and
quadrupled for Ss. (I mean, what self-respecting socialist charges
anyone rent?) Line 21 lists “other income.”
The instructions would encourage Liberals/Progressives and
Socialists to be creative in making up fake income, to
counter-balance fake news.

Next come write-offs against total income. They would be
severely restricted. For Ls/Ps and Ss, no educational expenses
(line 23); all educational spending should go to public schools. No
extra deductions for reservists (line 24), though the tax break
obviously would remain for artists and government officials. Health
savings accounts (line 25) would be verboten. After all, all health
care should be paid for and provided by government. No deduction
for half of self-employment tax paid (line 27) — instead,
Ls/Ps would pay a surcharge of one-third and Ss of two-thirds.
Someone has to shore up Social Security and Medicare!

Of course, no deduction for Liberals/Progressives and Socialists
for self-employed retirement plans (line 28), self-employed health
insurance (line 29), and individual retirement account (line 32).
All of these involve money taken from government. Student loan
interest (line 33) could be deducted by Ls/Ps and Ss only for
government loans. Nor could tuition and fees (line 34) be deducted
by Ls/Ps and Ss. Education is supposed to be public.

After adjusted gross income, which should be substantially
inflated for those who believe that government is being
shortchanged of necessary revenue, come further adjustments. Ls/Ps
and Ss could only take the standard deduction (line 40). No fake
itemized deductions for those who want more government to make the
world a better place. And as noted earlier, no exemptions (line
42). Also barred would be a series of unfair tax credits: foreign
(line 48), education (line 50), and retirement savings
contributions (line 51). People should pay more, not less, if they
are earning money overseas. And, again, education and retirement
are government responsibilities. Government should spend everything
in this area.

Then there are all the tax extras that Liberals/Progressives and
Socialists should add. Self-employment tax (line 57) should be
hiked one-third and two-thirds, respectively, for them. So should
unreported Social Security and Medicare tax (line 58). Additional
tax on IRAs (line 59) should be doubled and quadrupled,
respectively — retirement contributions should be going into
the Social Security trust fund. Household employment taxes (line
60a) should be five times higher for Ls/Ps and ten times higher for
Ss. After all, how can genuine liberals/progressives, let alone
socialists, have servants?

For Liberals/Progressives and Socialists the “health care:
individual responsibility” tax (line 61) would be revived.
Line 62, which covers miscellaneous taxes, would encourage Ls/Ps
and especially Ss to include taxes which they should owe,
as a matter of social justice. No reason to hold back, just because
conservatives aren’t on board. Finally, anyone on the Left
would be expected to eschew taking the many tax credits for which
they might be eligible. No nontaxable combat pay election (line
66b), American opportunity tax credit (line 68), and net premium
tax credit (line 69).

If at this point a L/P or S was still due a refund, he or she
should start over, and be more aggressive in finding ways to owe
more. To address this terrible, embarrassing circumstance line 75,
for amount overpaid, would be amended to encourage
Liberals/Progressives and Socialists to make up fake income. You
really don’t have to be honest with the IRS if you are
claiming more money than you actually received. The subsidiary
forms also offer frequent opportunities for Ls/Ps and S/s to
inflate their taxes. Doing so just requires commitment and
creativity — and determination to do one’s leftist duty
to humankind.

The Ethicist has unaccountably encouraged those with more
refined moral sensibilities to shirk their duty to the collective.
Congress and the president should help. It’s time for tax reform
directed at Liberals/Progressives and especially Socialists to
ensure that they pay all they pay, and even more.

Doug Bandow is
a Senior Fellow at the Cato Institute and a former Special
Assistant to President Ronald Reagan.

Click here to view the full article which appeared in CATO Journal