While not uncommon at all, one of the more bizarre behaviors is the continual angst for others to pay more in taxes. Supposedly, if the government has even more money for programs and social engineering, the better off we’d all be. Thus, those with a collectivist mindset shriek in horror or are perhaps tinged with envy when it comes to people having more choices concerning the fruits of their labor and property.
Perhaps the best state constitutional amendment North Carolina voters may see this fall is the decision to lower the income tax cap from 10 percent to 5.5. percent. When the income tax was first implemented in North Carolina in 1921 the cap was 6 percent and it was changed to 10 percent in 1936. Likely, the Great Depression played a role in an increase in the limit.
Independence Day is coming up, and our nation was founded in part on the motto of “no taxation without representation.” But as the liberal economist John Kenneth Galbraith once noted of the American Founders: “They were also, a less celebrated quality, equally opposed to taxation with representation.” The English writer Samuel Johnson declared that the American colonists “were probably the lowest taxed people in the history of the human race, and they resented every penny.”
This amendment is promising because it has a two-fold effect in helping to enshrine some of our American traditions: It indirectly declares that there are proper limits to spending, and it functions in a way as to institute the purpose of government, which is to protect private property. Given the saying “death and taxes,” we all know taxes are a part of life, but lessening that burden has arguments beyond it’s just good for economic growth. Another promising aspect of the amendment is that it’s easy to comprehend, and all the more value it holds in putting it before voters and letting them decide.
Besides the simple but true premise that people should have a right to as much of their own labor and capital as possible, I think one of the most important moral cases for low taxes is that it contributes to greater individual ownership in all aspects of life. While the government can have a role in helping those in need, it’s ultimately ill-equipped to solve so many problems related to poverty. Brian Balfour has already pointed this out well in his two-part Toxic Agenda series on poverty in North Carolina. Government spending often crowds out important charities and civil society when it comes to uplifting and helping the poor. In many societies that levy high taxes, individuals do little to care for or help the poor. For them, that’s merely the job of the state.
I think too often conservatives or proponents of limited government argue for lower taxes on more materialistic grounds, meaning it’s the right thing to do because it produces economic growth or wealth creation. Those are all good things, but wholly insufficient when it comes to making the best argument. Especially since the other side is often primarily making a moral argument over an economic one.
Undoubtedly, one of the strongest arguments is to promote human flourishing. The government must give space for its citizenry to make their own decisions about how one’s income and capital are utilized. Government is limited for a reason and when it’s not, it’s the people who suffer most. Citizens should always be vigilant to place the government in its proper sphere and tasking it with the things it can do best, which is minimal in a flourishing society.
I think lowering the cap on the state income tax is a good foundation for accomplishing not only essential limits to the government but also achieving more ownership for the citizenry to do what the state can’t do.