I know it’s been said before, but it merits repeating: the debate about taxes in general, and about extending the Bush tax cuts in particular, only sounds like the issue in question is fiscal. It’s not. The Right and Left differ on tax policy primarily because of a difference in values.
Broadly speaking, the Right believes that your stuff is yours. The Left believes your stuff doesn’t really become your stuff until the government says it is. So the Right sees taxes as a way to pay for necessary government services. The Left sees taxes as an instrument of social control and redistributive justice.
Look at the graph accompanying this Christian Science Monitor story about whether the Bush tax cuts should be extended. Citing data from the U.S. Treasury and the Urban-Brookings Tax Policy Council, it pegs the annual fiscal impact of extending the tax cuts at $366 billion. Of that amount, the vast majority, $298 billion, reflects tax provisions that President Obama and both parties in Congress agree should be extended: the marginal-rate cuts, estate-tax cut, marriage-penalty relief, and tax credits for which low- and middle-income taxpayers are eligible.
What’s at issue is another $68 billion in tax provisions affecting upper-income households. It is simply not credible for Democrats and liberals to say they oppose extending those tax cuts because of concern for budget deficits. The real reasons are just old-fashioned envy, hard egalitarianism, soft socialism, and Keynesian claptrap about the economic benefits of redistributing income to promote consumption over saving.
I agree with the supply-side argument that virtually all Americans benefit from the growth effects of keeping marginal tax rates low. But the most important reason to extend the tax cuts for everyone is that it is wrong for the government to steal and redistribute income. The proper goal is proportional taxation — if you have twice the standard of living I do, it is reasonable to conclude that you receive roughly twice as much value from the provision of core government services and ought to pay roughly twice as much to fund government. As Ronald Reagan used to say in his “Time for Choosing” speech, quoting a Scottish economist, “The moment you abandon the cardinal principle of exacting from all individuals the same proportion of their income or of their profits, you are at sea without a rudder or compass and there is no amount of injustice and folly you may not commit.”