Why Voluntary Taxation is a Bad Idea

If, instead of the "Buffett Rule," we just decided to make it optional for millionaires and billionaires to give more, then why would we ever raise taxes?

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In response to President Obama’s proposal that millionaires and billionaires pay at least the same tax rate as middle class families, the conservative Super PAC American Crossroads released an online petition that reads: “President Obama and Warren Buffett are deeply troubled by how low their taxes are. Nothing is stopping them from paying more in taxes voluntarily. Sign the petition to encourage Obama and Buffett to put their money where their mouths are when it comes to the ‘Buffett Rule.’”

This weekend on Fox News Sunday, anchor Chris Wallace asked President Obama’s senior adviser David Axelrod, “If the president feels so strongly about tax fairness, is he going to contribute money to the Treasury?”

On its face, the idea seems sensible enough: Want to raise taxes? Then voluntarily pay higher taxes. Of course, even if every one of the 138 millionaires calling for higher taxes on the rich wrote a million dollar check to the government, that’s nothing compared to the $47 billion the Buffett Rule would generate in additional tax revenue. But the larger point is that our Founding Fathers made taxes compulsory — not voluntary — for a reason.

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In Article 1, Section 8, Clause 1 of the United States Constitution, government is expressly granted the right to tax its citizens in service of the general welfare. Subsequently, in his farewell address as our nation’s first president, George Washington said, “It is essential that you should practically bear in mind that towards the payment of debts there must be revenue; that to have revenue there must be taxes; that no taxes can be devised which are not more or less inconvenient and unpleasant.” In other words, our founders knew what we have always known — no one really wants to pay taxes, but we all need and benefit from that which our taxes fund.

If we relied on voluntary taxes, donors would begin insisting that they could earmark their donations—say, to the military or to Medicaid and food stamps. But the reality is that national defense helps all of us, so those not contributing to the military would become “free riders” in economic terms. Voluntary taxation is also a slippery slope—if, instead of raising taxes on millionaires and billionaires we just decided to make it optional for them to give more, then why would we ever raise taxes or close corporate loopholes?

A whopping 60% of Americans support the so-called “Buffett Rule” that would raise the tax rate on millionaires and billionaires to more fair levels. But to those who would critique such taxation as redistribution, the fact is we already have redistribution in America — with taxes flowing out of the pockets of mostly liberal, coastal states and into the government benefits used disproportionately by conservative states in the middle of the country. That’s the point of compulsory taxation: were not likely to spend our money on the “general welfare” of anonymous seniors or elementary school students who live halfway across the country from us.

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What’s more, taxation is a way to fund stepping stones of opportunity for the next generation. Thomas Jefferson once wrote, “Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise.”

In fact, in 1776 — the same year as our nation was founded — capitalism’s founding father Adam Smith wrote, “The subject of every state ought to contribute towards the support of the government as nearly as possible in proportion to their respective abilities.” Those who have more should pay more. But at the very least, they shouldn’t pay less. As a nation founded on principles of fairness and opportunity, we can and must do better than that.

At the end of the day, no one forces you to be an American. It’s like a club that we’re all fortunate enough to be members of. But if you want to be a member, you have to pay your dues. Taxes are the compulsory dues we pay to be Americans, and whether you use every benefit or agree with every policy, part of what our taxes pay for is a democracy. You don’t decide your own tax rate and how it gets spent; we, the people, do. And we, the people, must all abide accordingly.

Happy Tax Day, America. Thank you for preserving the general welfare — for all of our benefit.

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