Belding: Tax cuts expiring probably won’t bring about apocalypse

Michael Belding

Your money is not sacred; your bank accounts are not inviolable. There is a point at which, having ensured and achieved your own subsistence, you need to begin putting forth an effort to secure common needs. Philanthropy is very kind of people, but there comes a time when one should probably pay higher taxes because of wealth.

The Bush tax cuts were recently set to expire. President Barack Obama and the men who will lead the House of Representatives and the Republican Congressional caucus come January recently met and decided to extend those tax cuts for, among others, America’s top income-earning individuals.

I applaud Obama in this instance for being cooperative with members of a party other than his own. I do not, however, applaud the Republican stance that allowing top income tax rates to rise would be catastrophic for the American economy. The past several years have already been catastrophic.

I do not mean to say that taxes on the wealthiest Americans should be raised to astronomic heights, or to proportions much larger than they are now. But allowing taxes to rise from 35 percent to 39.6 percent does not seem like too much to ask of the people who have more to lose from either a collapse of the economy or a collapse of the American constitutional system.

For the sake of argument, let’s accept assertions that the rich contribute the most to the economy, through their business ventures, employment of others and reinvestment of profits. But the enormous vested interest of the rich in the American economy is exactly why they should be comfortable contributing to the stability of the American government. The wealthiest individuals are the ones with the most to gain from highly valued American dollars and bonds. They are also stand to lose the most from a total collapse in the value of American stocks.

The functions of the federal government are now tied up with the American economy and considerations of indebtedness. The military, entitlements such as Medicare and Social Security, other social problems, and foreign aid exact ever-increasing demands on the public treasury. And because the rich are the most politically involved class of Americans — because they fund the largest portions of political campaigns, and because they make up large and influential swathes of voters — they also benefit most from a stable, credible American government.

That being said, it is exceedingly important to strike a balance. The rich cannot be expected to pay for everything. Their wealth only exists as long as it is not, for our purposes here, taxed out of existence. When John F. Kennedy said, “Ask not what your country can do for you — ask what you can do for your country,” he spoke as a man who loved freedom.

The power of our republican system was, until mass media and elections in which every adult could participate ensured that it was confused with democracy, held to extend only to public matters — situations in which everyone, or nearly everyone, was caught up. Government services to rich and poor alike should be the same. It is not the duty of a republican government to meet needs stemming from private circumstances in a citizen’s own control.

Ours is supposed to be a limited Constitution. Alexander Hamilton, in Federalist No. 78, described a limited constitution thus: “one which contains certain exceptions to legislative authority.” That is, there are certain spheres into which government cannot legally intrude. Political activity cannot properly, in a republic, remedy harmful circumstances that were entirely a citizen’s own doing. It only exists to protect people from harm they can do nothing to prevent.

Compromise is important. The wealthiest citizens in a country are the best-placed to lead it through times of difficulty. This is largely because they have the most to gain from recovery and the most to lose from failure, and possess the largest resources to put at a recovery’s disposal.

But, whether their contributions are exacted through taxes or contributed voluntarily to the state, it must be remembered that constitutional systems know their bounds. Simple need is not enough to warrant government intervention. The need must stem from forces which cannot be insulated against.