February 2013 - Volume 21, Number 1
Mirror, Mirror On the Wall; Who's the "Fairest" of Them All?
by Deborah D. Thornton
Discussions of “fairness” and “equity” have been rampant over the last few years. There must be fairness and equity in all things. And if not, something must be done to change it. Winter is a time for reading and two books on my list highlight this issue.
The first, Who’s the Fairest of Them All? by Stephen Moore, is a fairly short – yet dense – discussion of the reality of opportunity, taxes, and wealth in the U.S. over the past 100 years. Moore delves into the real numbers and results of economic growth, jobs and wages, and tax policy.
The four different major tax rate cuts – under Harding and Coolidge in the 1920s, Kennedy in the 1960s, Reagan in the 1980s, and Bush in the 2000s – all resulted in significant economic growth and increased tax revenues to the federal government.
American families all benefited each time tax rates were cut as jobs, investment, and innovation increased significantly. In the ‘20s we became able to afford radios, indoor plumbing and hot water, and movies. In the ‘60s we purchased TVs, washers and dryers, plastics, and Ford Mustangs. In the ‘80s air travel became the norm, along with microwaves, and a guy by the name of Bill Gates was busy.
Following the cuts of the early 2000s under President Bush, by 2005 even the poor – those claimed to be most “unfairly” treated during his administration – could afford color TVs (97 percent of all poor households), personal computers (78 percent), and cell phones (82 percent). Virtually every home in America now has technology unthinkable 100 years ago and we work less time to afford it.
In addition, following each of these tax-rate cuts the amount of revenue actually collected by the federal government from the “rich” increased significantly. Unemployment rates decreased and real incomes of all Americans increased. Women and minorities increased their incomes at greater rates than others did; the poor became less poor, and many people moved into the middle class. Moore provides solid documentation of these facts.
Interestingly, state tax rates also have significant impact. In general states with the largest population and economic growth over the last 30 years, Arizona, Florida, Georgia, Nevada, Texas, and Utah all have low or no personal income tax. In contrast, high personal income tax states such as Michigan (6.85 percent), New York (12.62 percent), Ohio (7.93 percent), and Vermont (9.4 percent) have lost jobs and population.
Tax cuts change behaviors and conditions for employers and employees, investors and consumers, by encouraging them to work, save, and invest. The end result is fairer for all.
Moore ends his book by discussing the flat tax, using evidence from Hong Kong. Hong Kong has had a simple 15 percent flat tax for the last 50 years. It is “one of the wealthiest places on the globe.” He also focuses on the improper use of the tax code both to reward behaviors as varied as charitable donations, home buying, college, and energy efficiency, to punish behaviors such as cigarette and alcohol use, and to encourage special-interest loopholes. He also argues that the tax code complexity is inherently unfair – two people with basically the same income can pay radically different tax rates based on their understanding and use of these deductions and loopholes. In conclusion, the current system is not fair.
The second book I’ve found very interesting, useful, and scary is Unlearning Liberty – Campus Censorship and the End of American Debate, by Greg Lukianoff of the Foundation for Individual Rights in Education (FIRE).
Lukianoff clearly and convincingly presents evidence of the suppression of freedom of speech on high school and college campuses in the name of “fairness.” He raises significant concerns that our young people are learning both to just keep their mouth shut and go along to get along – and that it is both right and appropriate for those in power to be able to control and punish those who dare to offer a different opinion.
The First Amendment is designed to protect minority opinion. The idea that wrong or minority opinion must be suppressed – even if that opinion is considered racist or hateful – has the potential to hurt any one of us, because we are not always going to be “right” or in the majority. Protecting the right of one individual to be wrong protects all our rights to be wrong. This is the core of John Stuart Mill’s work from way back in 1859. But this is no longer true in our schools and colleges, the place where it should be most true.
Lukianoff discusses how this leads to both group think and the intellectual weakening of our students, as shown in the report “Academically Adrift,” where researchers found that few students know “how to argue or think critically.”
Unfortunately, a report just issued by the University of California in Los Angeles reinforces his concerns. A consistent 60 percent of college freshmen surveyed believe that they are above average in being able to discuss and negotiate on controversial issues, more tolerant of people with different beliefs, able to see the world from someone else’s viewpoint, and open to having their own views challenged. Yet amazingly 70 percent believe that “colleges should prohibit sexist and racist speech on campus.” This is up from less than 60 percent in 1992.
The step from prohibiting sexist and racist speech to prohibiting other kinds of speech, not only on campus but also in workplaces and communities, is a very small one. If a behavior is normalized in one circumstance, extending it to another is easy. Lukianoff gives many examples of students today not only accepting this censorship, but also supporting and promoting it.
The acceptance of speech codes, censorship of free speech, and limits on a core American freedom are encouraged under the guise of “fairness.” Likewise the government redistribution of private assets from those who earned them by their own hard work is accepted in the guise of “fairness.” I think “fairness” is overrated. I’ll take my chances – as my parents used to tell me, “Who told you that life was supposed to be fair? Now get to work.” Now stay away from that mirror – it lies.
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