November 08, 2024
Column

Ignorance and envy among the electorate

It’s not often that a political candidate drops the code language for a moment, and distills in a sentence or two his core beliefs about the proper role of government in American society. Former U.S. Sen. John Edwards did us that favor in his speech announcing his withdrawal from the presidential race last month.

Edwards asserted that ending poverty and economic inequality is the responsibility of the president. And he claimed he had assurances from Hillary Clinton and Barack Obama that they share his view.

Thank you, Mr. Edwards, for the chilling clarity of your statement.

Closer to home, a few days before Edwards’ announcement, veteran left-wing activist Nancy Oden of Jonesboro issued a lengthy manifesto on how to survive the hard times (BDN, Jan. 26-27). Her redistributionist schemes are very much in line with Edwards’ utopian vision. She would jack up the state income tax from 8.5 percent to 16.15 percent on incomes over $102,000 (“No one making that kind of money will even notice”), impose a luxury tax on expensive cars and boats, and guarantee a monthly income for all adults in Maine.

What a dream ticket – Edwards and Oden or Oden and Edwards – for all the self-styled “progressives” who view the major-party candidates as too timid in their prescriptions for what it will take to carry out the economic leveling of America. In any case, the collectivist notion that government’s job is to redistribute wealth has gained such widespread acceptance that virtually all candidates, regardless of party, pay lip service to the idea.

In terms of political rhetoric and public discourse, we are now a one-party country. And it looks more like the party of Karl Marx than the party of Karl Rove. Between now and November, we will witness a race to the bottom to see which candidates are best at pandering to the lowest common denominator of ignorance and envy in the electorate.

Consider the income-tax rebate legislation proposed by President Bush and passed by huge bipartisan majorities in Congress. Some taxpayers who paid hefty income taxes won’t get a rebate, while others who paid no income tax at all will receive rebates. This “economic stimulus package” is really a voter stimulus package. It is a direct transfer of income from those who earned it to those who didn’t.

If you think about it, John Edwards and Nancy Oden declaring a new war on poverty are the high-octane, turbo-charged version of John McCain and Olympia Snowe bemoaning “tax breaks for the rich.”

Never mind that the bulk of individual income-tax revenue comes from the very highest income earners, even after the much-maligned Bush tax cuts. The top 1 percent of income earners now pay about 32 percent of all federal income taxes, while the top 5 percent pay more than half of all income taxes. How much more will progressives and their fellow travelers demand before they’re satisfied that the rich are paying their fair share?

While the idea of doubling the state income tax on six-figure incomes is breathtaking, my personal favorite of all the wrong-headed proposals advanced by Oden is the luxury tax. Proposing this again in Maine is evidence of historical amnesia.

It wasn’t that long ago that Sen. George Mitchell, that champion of the common man, proposed a 10 percent luxury tax on boats selling for more than $100,000, as well as on cars selling for more than $30,000. Enacted late in 1990 with President George H.W. Bush’s signature, Mitchell’s new tax was a tidal wave that flattened the boat-building industry. Many people in the market to buy expensive boats either didn’t buy one or selfishly bought one overseas. Yacht retailers in the U.S. reported a 77 percent drop in sales in 1991. Boat builders estimated job losses at 25,000, including several thousand right here in Maine.

Mitchell’s luxury tax generated $16.6 million in new revenue, but the job losses cost the government a total of $24.2 million in unemployment benefits and lost tax revenues, for a net loss to the Treasury of $7.6 million. A centerpiece of Mitchell’s legislative legacy, the tax was finally repealed in 1993.

But apparently some refuse to learn from history. If they have their way with their redistributionist schemes, blue-collar workers will end up on the unemployment line again. But that’s OK as long as we can all feel good about sticking it to those selfish rich people.

The good news is that America’s entrepreneurial class will continue to create wealth and opportunity, despite the relentless efforts of the parasitic political class to smother and crush private initiative. So the next time you hear a candidate spewing the rhetoric of class warfare, keep in mind that the politicians would have no wealth to redistribute were it not for the innovation and initiative of entrepreneurs driven by the profit motive.

Lawrence E. Lockman lives in Amherst.


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