An outfit called Patriotic Millionaires for Fiscal Strength has drawn the attention of the Wall Street Journal with a letter calling for a tax increase on those earning more than $1 million a year.
The Journal reporter asked a couple of the "patriotic millionaires" why they don't just send in voluntary checks to the Treasury rather than trying to raise everyone's taxes. One of them, Dennis Mehiel, responded, "Let's carry this voluntary taxation argument to its conclusion. We already have a country like that, it's called Greece. No one pays taxes in Greece. We've had a progressive income tax in the U.S. for decades and during that time we had a growing middle class and increased affluence and increase consumption. To say we should just write our own checks is a spurious argument. It's catchy. But it has no validity in a substantial dialogue about public policy."
But the American millionaires are not like Greeks who don't pay taxes. In fact in 2007 the top 1% of taxpayers paid more than 40% of the federal income taxes, more than are paid by the bottom 95%. In 2008, the top 1 percent of tax returns paid 38.0 percent of all federal individual income taxes and earned 20.0 percent of adjusted gross income.
What's under discussion with the expiration of the Bush tax cuts isn't making all of American taxation voluntary, but whether the wealthy should shoulder even more of the tax burden than they do already. And while it's true that there were affluence and a growing middle class during periods of American history when American income tax rates were more "progressive" than they are now, Mr. Mehiel doesn't demonstrate that the tax rates were the cause of the affluence or the expanding middle class. Maybe the affluence and the expanding middle class happened despite the "progressive" tax rates, and if the marginal tax rates were lower, there would have been even more affluence, and the expanding middle class would have expanded even faster and bigger. Other conditions also obtained during those earlier periods — the federal government spent less than half as much money than it does today, for example — yet you don't hear from these quarters a clamoring for a return to those conditions.
Mr. Mehiel ran for lieutenant governor of New York in 2002 and lost after a campaign full of mud-slinging.
There's a certain asymmetry in this debate. The "Patriotic Millionaires for Fiscal Strength" get attention from the press, probably get invited to testify on Capitol Hill, see their names in the company of other famous and widely lauded people, and seem selfless. If some millionaires against tax increases were to start an organization called Patriotic Millionaires Against Coercion and Socialism, they'd get attacked as selfish, even though they're not the ones trying to force their own values on others. The Patriotic Millionaires Against Coercion and Socialism, if they ever got started, would argue that they'd rather exchange the money voluntarily with their employees, their shareholders, their customers, or their charities than have it taken by force by the government.
Even the name of the tax-increase group itself is tendentious. Is there anything unpatriotic about the members of the top 1% who figure that 40% of the income taxes is quite enough for them to pay already, thank you? Maybe they'd rather have the extra money themselves to spend on giving American flags to Boy Scout troops or on sending the families of injured soldiers to Disney World. You can be patriotic and prefer to spend your money on your country yourself rather than having it redistributed by your congressman and his lobbyist friends. As for the "fiscal strength" part, maybe the country will be fiscally stronger in the long run if taxes are low and the millionaires have more money at their disposal to invest in areas that lead to economic growth.