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Is The President’s Reason For Taxing The Wealthy Logical?

10 Aug

Assertion: President Obama’s press secretary, Robert Gibbs, recently said that it was okay to tax wealthy citizens for the health care of others because, “The president believes that the richest 1% of this country has had a pretty good run of it for many, many, many years.”

Assumptions: The “richest 1%” of citizens will be determined by their income tax returns, and taxation will start on the year that the president’s tax plan takes effect.

Analysis:

  1. A powerful method of determining whether or not an assertion is factual is called proof by contradiction. For example, consider the assertion that “all swans are white.” To prove the falsity of the statement, all that is required is that you locate a single non-white swan. (Historical note: Europeans believed that all swans were white until the mid-1600s when sailors first visited Western Australia, an area where black swans are not uncommon.)
  2. In our analysis we will present three cases that contradict the assertion that it is acceptable to tax the wealthy because “the richest 1% of this country has had a pretty good run of it for many, many, many years.”

Case 1: Assume you are an entrepreneur who has worked very hard for the past twenty years, trying to perfect an idea you conceived. During that time you and your family have lived very modestly, and have taken great financial risks. Today, you are finally at a point where you can sell your idea and make millions. However, because you will now be one of “the richest 1% of this country” you will be heavily taxed to provide health care for others, even though you have not had “a pretty good run of it for many, many, many years.” Just the opposite; you and your family have had a very tough time of it for twenty years.

Case 2: Assume you are an average guy or gal whose salary has never been anywhere near a million dollars a year, but you like to dream and you sometimes buy one of those jumbo lottery tickets. One fantastic day you actually win a mega-jackpot, and now you are a millionaire. You, too, will now be heavily taxed, although during the past many, many, many years you have had just an average income.

Case 3: Assume you are a hard worker but, due to various misfortunes beyond your control, during the past several years you have had a very tough time making ends meet. To your surprise, you are informed that when your uncle recently passed away he bequeathed you a sizeable fortune, and you are now a multi-millionaire. Yep, same result. You will be heavily taxed even though your life has been anything but “a good run” up until now.

Conclusion: The assertion is factually false. The president’s belief is based on a logical fallacy, namely that “the richest 1%” is a specific group of folks who have made a lot of money over the past many years. To the contrary, the population is comprised of millions of individuals whose incomes can vary widely from year to year, including a great many who may be wealthy today, but in prior years were not.

Next Post:

We’ll review the president’s assertion from a moral perspective.

-Ed Walker

 

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