By Teresa Welsh |
Yes, there are takers and makers—although the divide is not between those who do and do not pay income taxes at any given point in time. Medicare and Social Security, for instance, mean that most retirees are net recipients of federal spending—but many surely would have opted for other nongovernmental arrangements if they were not forced into those government programs. Many hardworking people temporarily have a negative tax rate because of the earned income credit early in their careers, and moderate income families were largely taken off the tax rolls thanks to the child tax credit—and those kids eventually grow up.
So Romney made a mistake correlating the maker/taker divide with income-tax-paying status. But there is a very large and pernicious "Taker Class" that does pose a serious threat to Americans of all income levels who spend their lives creating real value. Consider the vast "green energy" industry that exists only thanks to lavish government subsidies. Or our tax code, which is an embarrassing mess of special interest giveaways. Or the outsize lobbying power of the big banks, who are bigger and more influential than ever.
Takers are playing the Washington crony game, looking not to create value but to use the coercive power of government to rig the rules to give themselves special favors or to kneecap competitors. It's gotten so bad that you can't get away from political news by switching to the financial channels. Washington has such an outsized impact on everything that it's hard for most businesses to focus on creating value.
President Barack Obama promised to end this type of corruption, but in practice it's worse than ever. Probably because the bigger government is, the more incentive there is to focus on lobbying instead of creating value for customers. And that's a real shame.
About Phil Kerpen President of American Commitment
Daniel Mitchell Fellow at the Cato Institute
Daniel S. Hamermesh Professor of Economics at the University of Texas at Austin and Royal Holloway University of London