Ben Stein wants the rich to pay more taxes

I listened to the podcast of the April 20 Ben Stein interview on the Dennis Miller Radio Show while mowing the lawn last weekend.  It’s worth a listen.

Ben Stein said that he doesn’t see any way to fix the budget deficit other than raising taxes on the rich.

Here’s my paraphrasing of his comments:

The folks I live near who have three Bentleys and homes here and in Monaco have enough.  It’s not going to hurt them to pay more taxes.  I don’t see what else we can do.  The deficit is an emergency. I remember when tax rates were 90% and everyone had a smile on their face.  The deficit has gotten worse since Bush’s tax cuts and we need to fix that.  It’s a matter of arithmetic.  I don’t know where else the money is going to come from, without big changes in the structure of our government and how it spends money — and that’s not feasible.

Miller made some good points in rebuttal.

He said raising taxes on the wealthy will cause them to shift their activities to avoid paying those higher taxes.  Thomas Sowell explained that well recently on Fox Business.

Miller also expressed his difficulty with expecting the rich to bail out the reckless spending of politicians and that doing so would only lead to more reckless spending and deeper deficits.

He believes a fundamental reduction in government spending is in order and he doesn’t want to be beholden to Stein’s nostalgia (for the days of 90% tax rates).

All good points, but Stein kept asking, “But then, where’s the money going to come from?

I think Miller’s best point for those who support raising tax rates is that it would lead to more government spending.  The problem has never been revenue.

The cause of the deficit has always been politicians who cannot restrain spending to revenue. Even after Bush’s tax cuts and a bad economy, the Federal government collected $300 billion more revenue in 2010 than in 2000, while it spent $1.8 trillion more (source – first table).

This problem may be caused by voters who do not wish politicians to restrain spending. Which in turn might be caused by disproportionate shares of government being paid by a small groups of voters.  If everyone had to pay a fairer share of government — even as a percent of their income — they might be more interested in holding politicians accountable to spending.

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