Social Contract

Over the past few weeks, President Obama has demanded that “millionaires and billionaires” (defined as anyone making more than $250,000 per year ) “pay their fair share.” No matter that those making over $250,000 per year pay approximately 45% of all taxes collected and those in the top 10 percent of all income earners pay almost 70 percent.

Many of us in the Center and almost everyone on the Right views the President’s demands as blatant class warfare and a cynical political ploy to rally his base on the Left. In fact, the current rallying cry of the President's supporters is to dismiss any suggestion that class warfare is in play. Instead, people like Elizabeth Warren and an increasingly unhinged Paul Krugman have begun talking about a “social contract.”

Those who use the phrase “social contract” suggest that the government provides the infrastructure (e.g., roads, fire, police, the courts) that enables, say, a “rich industrialist” to succeed, and that in return, he or she should pay his or her “fair share.” They never mention that small business owners—not rich industrialists— will pay the preponderance of the President's proposed taxes and it’s those small business owners who create jobs. They also never quantify what the "fair share" is. Apparently, 70 percent is insufficient.

But never mind—in the Alice and Wonderland world of the Left, it’s “fairness” that matters, even if fairness harms the economy, and as a consequence, the government programs that the President’s supporters purport to love so much.

People like Warren conveniently forget to mention that "rich industrialists" and small business owners work 18 hours a day to bring their ideas to market; that they put their own money at risk; that they create jobs—lots of jobs. That all they ask is for the government not to bury them in regulations, red tape, and onerous legislation—to get out of their way.

Well, not all. In the President’s economy there are politically connected entrepreneurs and politically-correct businesses like, oh, Solyndra. The administration forced a hesitant Department of Energy to provide Solyndra with a half a billion dollars in loan guarantees. Solyndra went bankrupt and the taxpayer's money is lost.

But that’s a mere speed bump on the road to the Left’s utopian world in which the “rich” meet their "social contract."

I’ve been thinking about this, and I have a suggestion. Since the “rich” currently pay 70 percent of all income taxes collected, why don’t we have them pay 100 percent! Ninety percent of taxpayers will then pay absolutely no income taxes—none. Even Barack Obama will be hard pressed to argue that isn’t fair—although he might.

All we’ll need to do is reduce the size of government across the board—federal departments, programs, entitlements, the whole shebang. With less money required to run the government, the “rich” could pay for the whole thing. That is, the tax dollars now collected (their existing 70 percent) would cover the entire cost of the government that is funded by income taxes. No new taxes for anyone, and for 90 percent of existing taxpayers, no income taxes at all.

That seems like a reasonable "social contract" to me. Right?

It's certainly no less irrational than the suggestion that a small group of people who pay for 70 percent of something that benefits a very large group of people are somehow not paying their fair share.