America has been irresponsible for too long, runs the rhetoric from the Obama White House, and that must be rectified. To that end, the president calls his budget blueprint, which outlines his spending and taxing priorities for the next 10 years, “A New Era of Responsibility.” But calling something responsible doesn’t mean that it is.
The Merriam-Webster online dictionary defines responsibility as a moral, legal, or mental accountability. The link with accountability infers that people willingly accept and face the consequences (costs) of their actions and decisions. In other words, there is a relationship between one’s decisions and actions, and the ramifications of them. Make good decisions and one should generally experience benefits while bad decisions lead to costs.
The Obama blueprint for a “new America” loosens these links of responsibility and accountability. On both education and health care, for example, the President wants more decisions to be made in Washington, D.C., which means fewer decisions and thus less responsibility on the part of parents, patients, and doctors.
Similarly on energy, the President plans to make wholesale changes in the nation’s energy markets not by allowing consumers, investors, and entrepreneurs to react to changes. He prefers a grand decree from Washington.
This centralization removes, or least diminishes, the ability of individuals to make self-improving decisions, which necessarily means a loss of responsibility and accountability. People can’t be held responsible for decisions they don’t make directly.
Perhaps the removal of responsibility for government is no more evident than in the area of taxation. President Obama has proposed shifting the tax burden away from the vast majority of people towards the top 5 percent of earners in the country.
The discussion on taxes normally focuses on income taxes. According to the Congressional Budget Office, in 2006, the most recent year for which comprehensive tax statistics are available, the top 20 percent of households earned a little over half of all the after-tax income (52.1 percent) but paid a full 86.3 percent of federal income taxes.
However, there are other taxes that need to be considered, including payroll and excise taxes. The top 20 percent of households paid 69.3 percent of all federal taxes. This is nearly a full 20 percentage-points higher than their relative proportion of income (52.1 percent).
Contrast this with the bottom 60 percent of households — the majority — who earn 28.5 percent of all income (after-tax) but pay only 14.0 percent of all federal taxes. Put differently, the proportion of all federal taxes paid by 60 percent of Americans is half the proportion of the income they earn. The federal tax system is already highly progressive, meaning that as individuals and households earn more, they pay proportionately more in taxes.
To understand how this progressivity in the tax system relates to responsibility, one simply needs to understand that Americans in the bottom half are increasingly removed from the responsibility of paying taxes for the services and income transfers they receive.
President Obama plans to amplify this rescinding of responsibility by individuals and families to the federal government by expanding the state’s role in education, health care, energy, and environmental regulation, to name but a few. What the president offers is not responsibility but a more activist and interventionist vision for the U.S. federal government that lessens individual responsibility.
Jason Clemens is the director of research at the Pacific Research Institute in San Francisco, CA (www.pacificresearch.org)