by George Leef
Arthur Brooks (president of AEI) and Ed Feulner (president of Heritage) present their case against further tax increases in this USA Today piece.
You can’t say everything in the space of an op-ed piece and the points they make are sound, but I don’t think they got down to the root of the matter. They argue that the tax increases won’t yield “enough” money (enough, presumably, to let politicians say they’re reducing the deficit) and that the money would in significant measure come from small business owners and thereby lower their ability to expand. Both observations are true, but there would still be good reason to oppose the proposed tax increases even if they completely covered the current deficit and even if all the money came from “rich fat cats” rather than small business owners.
That is because America’s economic problem stems not from any shortage of tax revenue, but from a vastly bloated federal government that wastes wealth, misallocates resources, and distorts incentives (away from productive activity and toward rent-seeking). Any additional resources sucked into Washington’s maw will allow the beast to grow further. We don’t need a “balanced” approach, but a completely unbalanced one — all spending cuts and no tax increases.
The talk about taxes is just a diversion. The true issue is the size, scope, and intrusiveness of the federal government, relentlessly undermining both our prosperity and freedom. Whether Obama gets his revenge and tax rates go up or not doesn’t matter in the long run. As Milton Friedman correctly observed years ago, the burden of government is not how much it taxes, but how much it spends. To that I’d add that some spending is more burdensome than others. Spending to hire more IRS agents to enforce the taxes in Obamacare, for example, is more destructive than just building bridges to nowhere.