Eric Cantor on Raising Taxes on the Poor: 'You've Got to Discuss That'

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Should we raise taxes on richer Americans? Eric Cantor has a clear answer. Absolutely, 100% no.

Should we raise taxes on poorer Americans? Eric Cantor has a different answer: "You've got to discuss that issue."

Here's the fuller quote, via Tim Noah:

Cantor: We also know that over 45 percent of the people in this country don't pay income taxes at all, and we have to question whether that's fair. And should we broaden the base in a way that we can lower rates for everybody that pays taxes.
[...]
Q.: Just wondering, what do you do about that? Are you saying we need to have a tax increase on the 45 percent that right now pay no federal income tax?
Cantor: I'm saying that, just in a macro way of looking at it, you've got to discuss that issue. What is going to fund the necessary operations of the federal government. How do we allow for that to take place in a way that we can see a growing economy. Because whatever scenario you may choose to embrace about cutting the spending or reforming the entitlement programs, the necessary piece is a growing economy or you're never going to manage down and back to balance in the budget. So that's gotta be the goal. How do you deal with that? How do you deal with a shrinking pie and number of people and entities that support the operations of government, and how do you go about continuing to milk them more, if that's what some want to do, but preserve their ability to provide the growth engine? And that leads me back to saying those at the bottom end of the income scale want nothing more than to increase their income, to get up that ladder of success. So the goal should be, how do you do that? I've never believed that you go and raise taxes on those who have been successful that are paying in, taking from them, so that you just hand out and give to someone else. Those someone else[s] want hand-ups. They want the ability to get up the ladder.

It's true that more than 45% of Americans don't pay net positive federal income taxes. But 80% of them live in households making less than $30,000. They are automaticaly taxed at a lower rate, and they receive "refundable tax credits" that bring their tax bill past zero.

What would it take to force these lucky duckies to pay positive income taxes? It would mean instantly higher taxes for 70 million Americans. It would mean raising taxes on some of the poorest households by up to $4,000 a year, according to the Tax Policy Center.

A lot of what Eric Cantor is saying I agree with. Cantor says we need to fund the necessary operations of the federal government. I agree. He says that most people who aren't rich want to be richer. I agree. He says that the poor need help to climb that ladder of wealth. I agree. But his solutions are totally upside-down. If we need to fund the necessary operations of government, why go after where the money isn't? If people naturally want to be richer, why would slightly higher tax rates on income over $330,000 change their mind? If the poor need hand-ups, why make them poorer?

It is a matter of economic dogma that taxes discourage behavior. Eric Cantor has obviously convinced himself that higher taxes on income under $30,000 will discourage poverty. On the issue of ridiculous taxes, maybe we should create a new levy on comments that the tax code would be "fairer" if the bottom 40% did more to support the burden of top 1%. That sort of inanity ought to be discouraged.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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