The president never bothers to mention that as of today, the top 1 percent earns about 20 percent of the wealth but pays close to 40 percent of the taxes. Does he really believe that there would be no wealth distribution from rich to poor under a flat tax, given that a huge fraction of public revenues goes to a range of transfer programs from which the rich derive little or no benefit? Nor does he ever contemplate the possibility that lower tax rates could generate additional revenues for the entire system.
And why does the president take this view taxation and income policy? Because, at root, the president is an egalitarian, not a marketeer. He has no theory of what a system of optimal taxation would look like. To lawyers and economists in the classical liberal tradition, it is a good thing, not a bad thing, if the richest person in society gets richer—so long as no one else is made poorer. But to the committed egalitarian, that supposed social improvement in fact poses a real threat because it increases the amount of inequality of wealth in society.
So the president blissfully advocates programs that reduce overall social wealth in order to soften these wealth differences. But it’s a mug’s game. In the end, it is growth, and only growth, that can cure the national malaise. And that means letting the rich get richer so that they can bring the rest of us along with them. But just as King Canute could not stop the tides, so it is that President Obama cannot draw blood out of a stone. What the president thinks are zero-sum policies are in fact no such thing. Given how they distort market incentives and increase political strife, Obama’s progressive policies translate into a profoundly negative-sum game, which, when replicated over time, will strip this nation of the entrepreneurial spirit that accounted for its past greatness.