On THE FIRST STREET JOURNAL we have the button shown here on the right-hand sidebar, because many of our friends on the left believe that we are undertaxed. If you believe that you don’t pay enough in taxes, you can use this button to connect directly to the United States Treasury Department, and voluntarily pay more in taxes.1 Now, Todd Henderson, a law professor at the University of Chicago has looked at just how often those who say we ought to be taxed more put their money where their mouths are:
We can now add actor Will Smith to the growing list of celebrities, business leaders, and politicians who have recently come forward to complain that they don’t pay enough in taxes. Bill Gates has volunteered to pay more. So too has Warren Buffett. Most colorfully, the author Steven King recently penned a piece for the Daily Beast, “Tax Me, for F@%&’s Sake!”
We should take them up on their offer. But this does not necessarily mean raising everyone’s taxes. If we can figure out a way to get the rich who want to contribute more to the government to pay voluntarily, then everyone will be better off.
Nothing prevents taxpayers from paying voluntary taxes. The federal government has accepted voluntary donations to the Treasury since the 1960s, and receives about $3 million per year against a deficit now exceeding $1.3 trillion. Many states also allow individuals to pay more taxes voluntarily. Few do. Case in point: Virginia’s “Tax Me More Fund,” which was implemented in 2002 to close a budget shortfall. Over the past decade, the fund has taken in a total of about $12,000.
Hat tip to Glenn Reynolds, the Instapundit. There is a group called the Patriotic Millionaires for Fiscal Strength which advocates higher taxes on the top producers, but it seems that they don’t actually do much on their own, given that the Treasury Department receives so little each year in voluntary contributions.
‘Patriotic millionaires’ demand higher taxes, but unwilling to pay up
By Michelle Fields | Published: 12:24 AM November 17, 2011
WASHINGTON — Two dozen “patriotic millionaires” traveled to the Capitol on Wednesday to demand that Congress raise taxes on wealthy Americans.
The Daily Caller attended their press conference with an iPad, which displayed the Treasury Department’s donation page, to find out if any of the “patriotic millionaires” were willing to put their money where their mouth is.
It was, of course, no surprise to anybody that the Patriotic Millionaires didn’t put their checkbooks where their mouths were. But the hypocrisy gets even worse:
What a rush to have millionaires do your bidding. And President Obama has several of them.
Four of them were like the president’s puppets on a White House stage with Obama Wednesday. They stood mute, but Mr. Obama gladly spoke for them. Each millionaire, he said, believes they should pay higher taxes. (These millionaires also want you to send money to them. More on that later.)
“They haven’t been asked to do their fair share,” the president declared. “They believe there is something deeply wrong and irresponsible about that.”
They haven’t been asked? Isn’t part of leadership taking the lead, and taking action, even if no one else has asked you yet?
That should have been the cue for the four to whip out their checkbooks and write checks to the Treasury on the spot. They didn’t. However, all four are political supporters of President Obama and have written checks to his campaign.
So, these fine gentlemen aren’t really unfamiliar with the act of writing checks; they were able to do it for a cause the support, the re-election of President Obama, but are seemingly unable to do so for the cause that they said they supported, higher taxes on the top producers.
Each is also part of Patriotic Millionaires for Fiscal Strength (PMFS). Last November, PMFS members marched on Congress (perhaps aided by chauffeurs) to lobby for higher taxes. Yet despite their rhetoric, they weren’t ready to help reduce the federal deficit or debt. The Daily Caller’s Michelle Fields confronted several of them and asked if they would voluntarily contribute to the U.S. Treasury to help pay down the national debt. Each one of these OWS (Obama Wealthy Supporters) refused.
Much more at the link. Mr Istook goes through their logic — if it can be called that — for not making voluntary donations, and then he gets to their real hypocrisy: the Patriotic Millionaires, who are so unwilling to make voluntary donations to the very cause they say they support, are asking you for money!
Curious why such filthy-rich people would need our charity, I clicked through to the donation page. It offered no information about where or how donations would be spent. Still, feeling more generous than they were toward reducing the national debt, I gave $1 through my PayPal account. The receipt finally told me that my $1 went to the Agenda Project Education Fund. I found their website, AgendaProject.org.
The Agenda Project is the parent group of the Patriotic Millionaires; it is a hub and a clearinghouse for left-wing causes and ideas. Its online newsletter not only promotes higher taxes, but urges people to question Mitt Romney’s Mormon faith, hints that conservatives are racists and otherwise launches well-known liberal screeds.
Much more at the original that I cannot reproduce without violating copyright but, in brief, these fine gentlemen who say that they are undertaxed, though they seem unwilling to lead from the front, with their checkbooks, are actually shilling not for reducing the deficit or the national debt, but for more money for the government to spend on liberal policies.
In the first article cited, by Dr Henderson, the author noted that, despite the dearth of contributions to the Treasury, Americans gave a whopping $212 billion to private charities in 2010. And he comes up with an interesting idea:
The big difference between charity and government is choice and competition. Wealthy individuals with a preference for government action may not voluntarily give to government because they are worried about how the money will be spent. Politicians, who may serve their own interests or may spend in ways that donors do not like, spend government money. The government cannot credibly commit to spend money on deficit reduction or the poor; it just might spend it on bombing Iran or building a bridge to nowhere.
One way to solve this problem is to allow taxpayers to earmark their voluntary tax payments as they would if donating to a charity. Will Smith could voluntarily pay $10 million (half his pay for each film he makes) to fund the food stamp program (or perhaps even individual families) or FEMA, instead of giving money to a local soup kitchen or the Salvation Army. The government already does this to some extent, allowing every taxpayer to voluntarily contribute to the public financing of political campaigns by paying an extra $3 in tax. This program should be expanded to allow itemized contributions to various government functions.
That seems like a reasonable option to me. It might be difficult to get it on Form 1040, like the presidential campaign deduction,2 because there are so many different agencies to which taxpayers might choose to give that it would quickly get fouled up, but every federal agency maintains a website, and it would not be difficult in the least for those agencies to add donation buttons to those sites.
However, Professor Henderson’s objection seems only partially accurate to me. The Treasury Department donation button states that contributions made thereto are directly into an account “Gifts to Reduce the Public Debt.” That is solely to reduce the amount of the national debt held by the public, not to fund various programs. It would, as far as line item spending is concerned, help only federal spending on debt service, not help fund other agencies, though, money being fungible, it could be argued that any money not spent on redeeming public debt could be spent on ammunition for the United State Army.3
If a potential contributor is concerned that money contributed wouldn’t really go to reducing the debt, there is always another way. The debt of the United States is held in the form of Treasury Bills, and Treasury Bills are both sold by the government at various auctions and traded at various stages of maturity among individual investors and brokers. Someone who wanted to contribute to reduce the debt could, on his own, buy up some number of Treasury Bills, and then donate back those Treasury Bills to the government, so they wouldn’t have to be paid off; that would directly and unquestionably reduce the national debt.
Of course, the real way to reduce the deficit and start paying down the debt is to reduce total federal spending. The last time the budget was balanced, FY2001, total federal outlays were 18.2% of gross domestic product. President Obama, according to his own FY2013 proposed federal budget,4 wants to spend more than 22% of GDP in every year, as far into the future as he can project, not only now, when the economy is in the slow-growth doldrums, but even in years in which he projects significant GDP growth and that the war in Afghanistan will be over. And for those who believe that the problem isn’t that spending is too high, but that taxes are too low, the highest level of federal taxation in our history was 20.9% of GDP, in FY1944 — the middle of World War II — which is less than what President Obama wants to spend in any year of his Administration, through FY2017, assuming that the voters are foolish enough to re-elect him.5 If some people wish to make voluntary contributions to reduce the national debt, the Editors of THE FIRST STREET JOURNAL completely support their right to do so, but the way out of our fiscal problems is not through raising taxes, but by cutting spending.
- The button was put up a few years ago on the old site as well. ↩
- Something to which your Editor never contributes and never will contribute. ↩
- A cause I would certainly support! ↩
- The link is to Table 1.2—Summary of Receipts, Outlays, and Surpluses or Deficits (-) as Percentages of GDP: 1930–2017, from the President’s official budget proposal. Your Editor added a couple of calculation functions to the numbers in the President’s budgetary proposal, and has that graph here. ↩
- Former Governor Mitt Romney (R-MA), the presumptive Republican presidential nominee, has promised to bring total federal spending down to “below 20 percent of GDP by the end of his first term . . . in line with the historical trend between 18 and 20 percent,” which your Editor believes is an improvement, but is still too high. ↩