Marginally Acceptable (Gwen Moritz Editor's Note)

by Gwen Moritz  on Monday, Feb. 11, 2019 12:00 am   3 min read

I was in the hospital recuperating from a C-section when a package arrived from a thoughtful relative. Among other things, it contained a relatively new children’s book called “Love You Forever,” which reduced me to a puddle of tears. Only after I returned to something resembling a normal hormonal state did I realize that it is a frighteningly bad book that celebrates a mother-son relationship so dysfunctional that it borders on criminal.

So, naturally, Robert Munsch’s 1986 book became a modern classic for the era of helicopter parenting. But its wild popularity does not mean that any mother should ever drive across town with a ladder on the roof of her car in order to climb through her adult son’s bedroom window so she can cuddle him like she did when he was an infant. This is not a model of healthy parent-child bonding.

It turns out that some concepts are too complicated for picture-book vocabulary, so maybe we just shouldn’t try. For instance, Scott Walker, who was recently replaced as governor by the voters of Wisconsin, took to Twitter last month to describe his attempt to explain “tax rates before Reagan” to grade-school students:

“‘Imagine if you did chores for your grandma and she gave you $10. When you got home, your parents took $7 from you.’ The students said: ‘That’s not fair!’ Even 5th graders get it.”

Of course, his anecdote bears no resemblance to progressive income taxation in the U.S., before or after Reagan. And either Walker, even after eight years as governor of a state that levies a progressive income tax, doesn’t understand how marginal tax rates work or he understands perfectly and was deliberately misleading those children.

Misleading Americans of all ages about marginal tax rates came in handy when congressional Republicans unilaterally crafted the Tax Cuts & Jobs Act of 2017 in order to borrow billions and give most of the benefit to the wealthiest. (If you believed that wasn’t the intended result, then your disappointment in the outcome must be palpable.) President Trump talked a lot about our top corporate tax rate, 35 percent, being much higher than most other developed countries — which was technically true but completely misleading. The average rate actually paid in 2017 was 18.6 percent, but that was obviously not one of the talking points.

A tax bill that spread that average more uniformly could have been crafted. Instead, the new law set a new top rate of 21 percent — and resulted in a $92 billion drop in corporate income taxes paid in fiscal 2018 and a $113 billion increase in the annual deficit. (Congress also could have crafted the kind of “major tax cut for middle-income people” that President Trump promised just before November’s midterm election, but then, for some reason, decided to go in a different direction. Go figure.)

So while the Arkansas General Assembly is engaged in something resembling a decimal-point price war like we used to see at gas stations, congressional Democrats and presidential hopefuls are going the opposite direction.

Beyond higher taxes on high incomes, Sen. Elizabeth Warren, D-Flamethrower, has suggested taxing net worth.

Walker immediately renewed his misleading simplifications: “Elizabeth Warren’s Wealth Tax is like telling a straight A student in high school that she has to give up some of her grades to the other students. Instead of stealing from her, why don’t we just help everyone else do better!”

Walker must not trust his chances in a substantive debate. Perhaps he saw the Fox News poll conducted in January that found 65 percent of registered voters liked the idea of raising marginal tax rates on people earning $1 million or more — and even more support (70 percent) raising taxes on incomes of $10 million or more.

Charles Payne, host of Fox Business’ “Making Money,” hilariously blamed schools for a subversive idea that has taken hold in recent years:

“The idea of fairness has been promoted in our schools for a long time, and we’re starting to see kids who grew up in this notion [of] fairness above all. And now they’re becoming voting age and they’re bringing this ideology with them.”

We’re never going to find a tax structure that suits everyone — this is the essential tension of governing. But any honest discussion would have to start with this: Taxation isn’t child’s play. We need a healthy, adult relationship between taxing and spending.


I’m also not a fan of Shel Silverstein’s “The Giving Tree.” That kid is a spoiled brat and the tree has a martyr complex.


Email Gwen Moritz, editor of Arkansas Business, at GMoritz@ABPG.com and follow her on Twitter at @gwenmoritz.

 

 

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