Lucky Duckies Again

In the current New Republic, Jacob Levy offers a modest defense of the WSJ editors for suggesting that we raise taxes on the poor (the “Lucky Duckies”) in order to generate a consensus on cutting taxes. His argument is basically an appeal to we’re-all-in-this-together-ism:

…it is the standard classical liberal argument for the rule of law, for not being ruled by an aristocracy exempt from the legislation it writes, and for hoping that justice will be blind. Only if laws are drafted and enforced without respect to persons or identities, only if they are prospective and general rather than retroactive and selective or arbitrary, can we expect anything like just governance.

To sometimes be yoked together under a shared institution in order to preserve its viability is the universal price of political life. … It should always be done with a bit of bad conscience, and without denying the element of exploitation. But no one should pretend to be surprised that it’s being done at all.

Thus, for example, Levy makes an analogy between “tax the poor” arguments from the Right and Rangel’s calls for reinstating the draft (so that the wealthy, or at least their 18-27 year old children, will pay part of the price of a war and therefore think carefully before starting one). Levy also rightly points out that Liberals often use similar arguments to support Social Security and to oppose school vouchers.

However, the generally smart Levy leaves a big part of the taxation picture out of his argument: nowhere does he mention the distinction between payroll taxes (which the working poor do pay) and income taxes (which many of the working poor do not pay).(*) All people who work do in fact pay taxes, but some only pay payroll taxes (the taxes that fund Medicare and Social Security). By Levy’s logic, there should be a national consensus to lower payroll taxes because everybody who works pays them. I’ve heard Democrats argue for such cuts, but no Republicans. In fact, because income over $87,000 is exempted from payroll taxes, Levy’s argument could just as easily imply that the wealthy are not sufficiently “yoked together” in society’s effort to fund Medicare and Social Security. Perhaps what Levy meant to say was “let’s get rid of the payroll tax exemption on income over $87,000.”


(*) Usually, this omission is opportunistic–made so that Republicans can justify regressive tax cuts by pointing out that the top 1% pay 30% of all taxes or something like that. Then when pressed, they’ll later say “by which I meant to say, but didn’t and never do unless forced, 30% of all income taxes.” In Levy’s case, I suspect he was just trying to make the points that the WSJ proposal was similar in spirit to other proposals made by Democrats and that the “we’re-all-in-this-together” argument has long been a part of politics. Still, if he’s going to invoke Kant’s Categorical Imperative, Levy should avoid mixing in Republican spin.