Who Pitches In?

by Don Boudreaux on March 10, 2009

in Inequality, Myths and Fallacies

Here's a letter that I sent recently to the Washington Post:

Dear Editor:

Pres. Obama's efforts to "redistribute" incomes, E.J. Dionne quotes an
administration official: "'Over the past two or three decades, the top
1 percent of Americans have experienced a dramatic increase from 10
percent to more than 20 percent in the share of national income that's
accruing to them,' said Peter Orszag, Obama's budget director.  Now, he
said, was their time 'to pitch in a bit more'" ("The Re-Redistributor,"
March 2).

This "Progressive" mindset poisons sound thinking.

in market economies incomes aren't "distributed"; they're produced and
earned.  Second, persons whose earnings rise disproportionately more
than those of other persons generally achieve this outcome by
increasing their production disproportionately more than other persons
increase theirs; the fact that someone's income rises means that he or
she already is pitching in more.  Third, the share of federal
individual income-tax revenues paid by America's top one-percent of
income earners has recently been on the rise
.  In 2006 (the latest year
for which data are available) this tiny group of Americans paid a
whopping – and all-time high – 39.9 percent of such taxes.

Donald J. Boudreaux


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