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Obama and the Bush Tax Cuts

Obama and the Bush Tax Cuts

5 Mins
November 23, 2010

November 18, 2010 -- The first great post-election policy decision facing the lame-duck, Democrat-dominated Congress is whether or not to allow taxes to skyrocket.

Usually referred to as the “Bush tax cuts ,” the rates that have been operative for most of this decade will expire at the end of 2010, reverting to much higher levels.

Even President Obama and his Congressional allies agree that a return to the past rates would harm most Americans, forcing them to pay $150 billion or more annually in taxes as they struggle in a depressed economy. The debate is whether to allow higher rates to hit households making over $250,000 annually, a debate that reveals the sordid soul of the left.


So far the arguments on both sides of the issue have mainly been economic. Those favoring higher taxes argue that the revenue is needed to offset federal budget deficits that will add another $10 trillion over the next decade to the national debt, which will then total over $20 trillion. The “rich,” it is argued, can afford the higher rates, which will bring in between $600 billion and $700 billion during that period.

Should individuals be morally obliged to justify keeping their own money , property, and economic liberty?

Opponents argue that the higher rates will probably not bring in that amount; more prosperous taxpayers will find ways of sheltering their income or will simply cut back on their productive activities, preferring more leisure to the diminishing returns at higher marginal rates.

Opponents also maintain that many small business owners filing as individuals will be hit by the higher rates on higher earners. That would kill a lot of jobs and businesses, which would mean less revenue for the feds and fewer jobs for the rest of us.

Further, opponents point out that the higher tax rates hit households that, while certainly above average, are not really “rich.” Two professionals who, after years of hard work, have achieved the positions of police chief and school principal might well find themselves targets of Obama and his minions on the left.


What is missing from this debate is a clear understanding of the morality that lies behind most who favor higher rates on the top earners.

To begin with, it is outrageous in a free country to assume, as proponents and even some opponents of higher taxes do, that individuals — whatever their income level — are morally obliged to justify keeping their own money , property, and economic liberty based on the good it does for their neighbors, “society,” or the economy. They aren’t!

The foundational principle of any free society is that individuals have the right to live for their own sake, to pursue their own self-interest, as long as they deal with others based on mutual consent rather than on the initiation of force or fraud. Further, there is no moral shame attached to such pursuits; indeed, individuals should take pride in pursuing their own happiness, in seeking the mix of career, income , family, friends, leisure, enlightenment and the like that serves them best.


Individuals with higher incomes will pay more in taxes under the Bush-era tax rates that could soon expire as well as under the older rates. But the callousness with which many advocates of higher rates go after the “rich” reveals the moral mess within their souls. They assume without question that the better-offs should feel ashamed for being better-off. The high-tax advocates who want to take wealth want to see themselves as standing on the moral high ground. They want individuals who have grown better-off principally through their own productive efforts to feel guilty for not volunteering to have even more of their wealth taken away.

It is the politicians who should be ashamed for running up multi-trillion dollar budget deficits.

But the moral thing for the better-offs to do would be to shout, “Stop punishing me for my virtues! It’s my money, not yours. Mind your own damned business, you moral midgets!” They should stop giving their moral sanction to those who victimize them.

It is the politicians who should be ashamed for running up multi-trillion dollar budget deficits. They should be ashamed of getting their pseudo-sense of self-worth by handing out our money in the form of favors to bribe others to think well of their thieving acts of redistribution (or at least to give them political support). They should be ashamed to ask us for even more money to cover the costs of their irresponsible acts that would be criminal if committed by any party but government. Those politicians’ behavior is morally criminal in any case.

Those politicians should come to us on their knees in apology. Instead our politicians continue to act with reckless arrogance rather than treating our lives, liberty, and property as sacrosanct.


When President Obama was laying the groundwork for the excuses for Democrats’ midterm election losses, he said, “People out there are still hurting very badly, and they are still scared. And so part of the reason that our politics seems so tough right now, and facts and science and argument does (sic) not seem to be winning the day all the time, is because we’re hard-wired not to always think clearly when we’re scared.” Wrong!

To begin with, fear can often focus the mind on facts, their adverse effects, and appropriate counter-measures. Those prehistoric primates that weren’t hardwired that way became dinner for saber-tooths. Many of us assessed the adverse effects of going over Obama’s fiscal cliff and of the chains he wanted to place on us, and we took appropriate counter-measures, voting his cronies out of office.

But let’s play Obama’s “hardwired” game for a moment as it relates to tax policy.

Some biologists suggest that humans evolved in small bands in which scarce resources were shared. No individual produced hundreds of times more food through hunting or gathering than anyone else. Thus we might have a hardwired egalitarian propensity to see extremes of wealth as the result of cheating or theft rather than ability and productivity, and to react with envy and resentment.

But consider a similarly hardwired propensity for sweet and fattening foods. Wolfing down such energy-boosting edibles on the rare opportunities when they were available might have given our ancestors a survival advantage hundreds of thousands of years ago. But today, with such goodies abundant, we must discipline that urge for the sake of our own health and survival.

Similarly, those on the left who might have the urge to punish the better-offs should understand that this makes no sense in a complex, market society of millions of individuals, many of whom actually produce hundreds or thousands of times more wealth than others.

Such egalitarians should appreciate that they are not slaves of their hardwiring. They should sit down, breathe deeply, and calm themselves. And they should look into their souls and see the need to discipline their envy urge, which is on display in most tax debates, for the sake of a peaceful and prosperous society that can benefit all individuals.

Edward Hudgins


Edward Hudgins

Edward Hudgins is research director at the Heartland Institute and former director of advocacy and senior scholar at The Atlas Society.

Edward Hudgins
About the author:
Edward Hudgins

Edward Hudgins, former director of advocacy and senior scholar at The Atlas Society, is the founder of the Human Achievement Alliance and can be reached at ehudgins@humanachievementalliance.org.

Regulation and Taxation
Elections and Democracy