For Pete’s Sake, Ensure Tax Fairness for the Workers
In a Fox News town hall on May 19, presidential candidate Pete Buttigieg was asked about the federal deficit and responded with a call for tax hikes. The South Bend, Indiana, major said he favored a “fairer, which means higher,” marginal tax rate. Moderator Chris Wallace, son of the late Mike Wallace of CBS’s 60 Minutes fame, failed to challenge the candidate on this claim.
A marginal tax rate is essentially the tax on the last dollar earned. A worker will play a higher rate when she earns the dollar that brings her income to $100,000 than she would on the dollar that brought her income to $50,000. Mayor Buttigieg believes it is “fairer” to take more money from the worker who earns more. Workers could be forgiven for thinking that higher tax rates for more productive workers are inherently unfair, and punitive, but moderator Wallace, a Harvard grad, failed to follow up.
Candidate Buttigieg also said, “You don’t blow a hole in the budget with an unnecessary and unaffordable tax cut for the very wealthiest.” This advice implies that a reduction in taxes is something that needs to be paid for, and something that governments can’t afford. In reality, to allow workers to keep more of the money they earn requires no government expenditure. Nor does it follow that allowing workers to keep more of their own money will “blow a hole in the budget.” Moderator Wallace did not pursue the point, and nobody in the town hall raised a deeper issue of fairness.
Through withholding from paychecks, a confiscatory practice that dates from World War II, the government gets the worker’s money before the worker does. Nobody asked Mayor Buttigieg about the fairness of that money grab. In a truly fair system, workers would get their own money first, and everybody would pay the same marginal rate. By all indications, the first openly fair presidential candidate has yet to appear.