Rick Scott’s Filing Error

S enator Rick Scott (R., Fla.) writes at the Daily Caller in support of his “skin in the game” proposal to have more people pay income tax. Or maybe not.

Scott says his idea is as follows: “All Americans should pay some income tax to have skin in the game, even if a small amount. Currently over half of Americans pay no income tax.”

That would seem to imply that over half of Americans would see a tax increase. That’s because Scott says that all Americans should pay some income tax, and over half of Americans pay no income tax, and some is greater than no.

Yet Scott insists his idea wouldn’t raise taxes. He says:

Retirees have already paid plenty into the system. And working-class Americans are already paying into the system, whether through income tax, payroll tax, state and local taxes. . . . My proposal wouldn’t change anything for them, but we should find ways to reduce their tax burden.

There are two categories of folks in America who do need to pay their fair share. We have a sizeable class of people in the country who live off government handouts, even though they could be working. I’m talking about able-bodied, working-age Americans. They need to contribute to the system they are benefitting from. The best way to do this is by getting a job. If they refuse to work, they need to be required to pay into the system.  We also have some very wealthy people who can hire an army of lobbyists, lawyers and accountants to avoid paying their fair share.

So that means under his plan, most of the Americans who currently, on net, pay no income tax will continue to pay no income tax. Most of the people who, after refunds and deductions, pay no income tax are working-class. According to 2019 tax data, the bottom 50 percent of earners (those who made less than $44,269 that year) combine for 3 percent of total income-tax revenue.

And what’s this “fair share” stuff? Why is a Republican senator talking like Elizabeth Warren?

Scott makes a serious category error in this paragraph:

I grew up in public housing and our family was poor. No matter how little we had, or how hard things got, my mother never stopped working and never stopped contributing to her community. My mom made me go to church every week and made sure I understood how important it was to tithe every week when the donation box got passed around – even if it was just a few pennies. It was important because that was our church, and we were part of that community.

His mother raised him right, and Americans should be active participants in their churches and communities. Part of that is financial commitment. But it’s a central tenet of conservatism that, contra President Obama, government is not another word for the things we do together. Paying income tax is not analogous to tithing, donating to charity, or supporting your community.

The income tax is compelled by government force. The revenue it raises feeds an unaccountable bureaucracy that infringes on Americans’ liberty on a daily basis. The federal government crowds out local, community-based forms of social support. Using “contribution” as a euphemism for taxation is an old progressive trick.

This is all very hard to take coming from Scott. In his article, he touts his record on cutting taxes as governor of Florida, and he’s right to do so. Florida is a very low-tax state and ranks fourth on Tax Foundation’s State Business Tax Climate Index and second on ALEC’s Rich States, Poor States report. Scott deserves credit for preserving and improving Florida’s tax climate during his eight years in Tallahassee.

One of the things that make Florida so attractive, though, is that it has no state income tax. Why does Scott’s “skin in the game” principle not apply to state governments as much as it does to the federal government? If Scott thinks it’s such a problem that over half of Americans pay no federal income tax, he should be really alarmed that all Floridians pay no state income tax.

As Ramesh Ponnuru wrote in 2011, the last time some conservatives were talking this way about the income tax, “There are many things to worry about in this world. The number of people paying income tax isn’t one of them.” There is not a vast swath of Americans who freeload off the federal government. One of the reasons for that is the welfare reforms that conservatives of yesteryear fought for and passed. Another reason is the one Scott acknowledges: They pay a litany of other taxes to federal, state, and local governments.

Taxation in general is a necessary evil, but some taxes are worse than others. The income tax is one of the worst. Its progressive structure discourages work and upward mobility, the exact things that conservatives such as Scott should seek to encourage. We should be glad that many Americans are functionally not subject to it.