Guest Post: A Tea Party Explanation

Last week, I posted a guest blog from my friend Zach regarding the Tea Parties that happened across the country last Wednesday. Another friend, Jeff, wrote a response, and I wanted to make that available as a guest blog as well. As politics is something I consider myself an ever learning student on, I’m open to hearing, and posting, different viewpoints on this blog. So, here is Jeff’s response:

A Tea Party Explanation


I appreciate the questions you have about the tea parties and the current unrest among fiscal conservatives about the current government policies and you are certainly not alone in both your questions and your skepticism.

I attended the Madison tea party with my girlfriend; we both took a day off of work to do so.  At the steps of the Capitol, directly underneath the Governor’s windows, over 5,000 people gathered to protest not only federal policies, but the policies of the state government as well.  I can’t speak to the individual motivations of each protestor, but I can off you my observations.   The crowd was a diverse mix of yuppies and country bumpkins, Madison residents in their flip flops and northerners with their hunter orange; blacks, whites, Hispanics, etc.  I saw Democrats, Republicans, and Libertarians.  I would venture to say that while Republicans were certainly represented, the majority of attendees were disillusioned with both parties. While their current anger is directed at the Obama administration, there is a healthy amount of disappointment, if not rage, at the Republicans who most feel failed us.

I showed up to protest not just the Obama administration or the Doyle administration, but the political culture in general.  Our current federal government has far exceeded its mandate and the powers which it was given under the Constitution.  Both parties have used tax and spend policies to consolidate power bases which they seek to enlist and reward every election cycle.  Political power has been removed from local constituencies where the people had the power and has been granted to untouchable politicians and special interests.   I protested the belief that thievery is justified so long as it is performed by the government and done in the interest of specific constituencies.

The questions you raise are complicated topics that we could spend several months debating, but I do want to answer some of them specifically and throw in some general facts and figures.  I appreciate the questions because it allows us all to take a closer look at what is going on and what our government is doing, and hopefully we’ll all be able to have a clearer understanding and a desire to become active in our own ways.

Are they protesting the fact that they are being taxed without representation?

Yes and no.   The Federal Reserve is an unelected body.  While the Federal Reserve does not have the power of direct taxation, they do have the power to print currency.   Yet, over the past months and presumably for many more months to come, the Fed is “injecting” money into certain companies and industries outside of TARP, stimulus, omnibus, etc which our elected officials have not voted on.   The effect of this practice is two-fold.  First it will lead to inflation which, though not a tax, will devalue any assets you currently own, which leads to the same outcome as taxation.  Secondly, interest and principle will eventually need to be paid on the bonds and securities which are issued to print this currency, and taxes will at some point be levied to do so.

As to the conduct of our legislators, one could make the argument that the current spending that is being introduced, and the levying of taxes to support such, could be considered “taxation without representation”.  At no point in the history of this nation has the Federal government carried such a deficit and burdened its progeny with such a debt as it is in the process of doing today. Our current legislators were not elected to spend in this fashion, not one campaigned on it, not one promised it, nor did one single legislator even propose such an idea until after the election.   When the current government took office, they proceeded to pass the legislation which has been mentioned without reading the bill, without giving the citizens a chance to read the bill, and without consulting their constituencies.   While they were elected democratically, I would hardly call that representation and be more inclined to call it mob rule. (I would also assert that levying a tax burden upon those whom are not yet born also equates to “taxation without representation”)

So are they protesting because our taxes are too much?

So are they protesting because taxes are being raised for those who make more than $200,000 a year?

Yes.  To say that the current “tax cut” decreased the tax burden on 95% of Americans is simply false and to assert that it is the largest in the nation’s history is a dangerous distortion.   Currently, only 40% of U.S. citizens pay Federal income tax.  I have yet to have a single proponent of the “tax cut for 95% of Americans” idea explain to me how those who do not pay taxes can receive a tax cut.  Under the current tax plan, that number jumps to 50% who do not pay Federal income taxes.   So even using the government’s number of 95% (which are false), 45% are receiving a tax cut while 50% are receiving an unearned credit.

Let’s break down some more real numbers.  At the current tax rate, the top 1% of income earners currently pay 40% of all Federal income taxes; the top 10% (average income of $92,400) pay 72.8% of all income taxes.   From 2001 through 2006, the tax burden on the top 10% increased from 67.8% to the current level.    By the real numbers, President Bush decreased the tax burden on those in the lower tax brackets significantly…so this myth that he gave tax breaks only to the rich is a myth.

This section could be filled with facts and figures that could turn this post into a book, so we’ll leave it at that and ask ourselves the question; are we taxing those who produce, those who own businesses, too much?  I don’t know how you can say that they do not, when they are already carrying the tax burden of the entire nation upon their shoulders.

So are they protesting because President Obama’s budget proposal is a record 3.6 trillion dollars over the next 10 years?

Are they protesting because Obama’s spending is pushing our National debt higher and higher?

Yes and yes.  The discontent over Federal spending during the Bush years is one of the primary reasons that the Democrats are currently in control of government.  As I have stated above, many protestors are as disillusioned with the Republicans as they are angry at the current government. That being said, the increase in not only government spending, but government control has increased at such blinding speed to create a stark difference between the spending habits of this administration and the previous.

Remember that the current budget does not include monies spent by TARP, the stimulus bill, the omnibus bill, etc.  What the budget does include is “down payments” on such programs as Universal Health Care, high speed rail programs, green energy etc.  To take Health Care as an example; the current budget appropriates $634 billion to simply start the program.  That cost is expected to rise to well over $1.6 trillion dollars within the next decade.   He is budgeting only $5 billion for a Federal high speed rail system.  A small rail system in Madison is currently estimated to cost $1 billion and extending that type of cost to a Federal system is almost too difficult to comprehend.

The Congressional Budget Office estimates that these types of cost are unsustainable.  Any citizen with common sense can reason that in order to simply pay the down payment on these types of programs will require revenues much higher than what the Federal government is currently receiving, and thus new taxes will need to be levied (and the amount of citizens carrying that tax burden is quickly narrowing).  Remember, this is just the cost of the programs and we are not yet even talking about the ability for the programs to be successful.

I don’t have the exact figures of what the deficit-debt to GDP ratio is estimated to be, but the ratio over the next 15 years will increase to a point that will dwarf anything the civilized world has ever seen.   Our current ratio sits at around 22% of GDP…already an unsustainable amount.

Are they protesting because they believe Obama is walking all over the constitution?

I’m not sure when President Bush suspended the writ of habeas corpus, but it is fallacious to assert that those currently protesting the government supported carte blanche the Bush administration and the ways in which it prosecuted the War on Terror.

The current Federal government (and past governments, but they are no longer in power) is absolutely acting outside of the powers which are enumerated in the Constitution.   The Constitution restricts the Federal government to certain defined roles and restricts its authority in matters which are not specifically granted.  The Constitution does not give the Federal government the authority to nationalize private industries, to “bail out” organizations or individuals, to distribute monies to individuals or states, to fund research or art projects, to levy taxes to support insurance programs, to regulate or fund educational institutions, etc.  This list can be extended to fill another book.   While the Federal government is granted the ability to levy taxes, it is unconstitutional to levy taxes that fund activities which the Federal government is restricted from participating in.  And to your examples of funding for the War on Terror, the Federal government is responsible for providing the national defense of this nation.

2 thoughts on “Guest Post: A Tea Party Explanation”

  1. Jeff,

    Thanks for taking the time to write out such a thoughtful response to my earlier post. I think it’s really important that regardless of where a person comes down on these issues, that at least they need to have thought through their position and you have clearly done so. I’m afraid there are some people that are much more affected by groupthink, soundbytes, and personality than by personal exploration into the issues themselves.

    Let me start off by saying that I understand the Libertarian position and I can completely understand why someone would hold to a Libertarian perspective. There are certainly great arguments for a minimalist US government and giving as much financial and social control to citizens rather than to the government. There are earnest and sincere people that believe this and I say more power to them, because our country and its direction is whatever we want to make it, and if that’s where the majority of Americans want for this country, then that’s what we will have, because the US really is “of the people.” Personally, I’m comfortable with and support having a more than a minimalist government. I like the idea that citizens’ collective taxes go to things like parks, highways, public libraries, and public schools. Obviously the government has many problems, such as wasteful spending and pandering to lobbies creating special interests. I completely understand the desire to protest these things.

    That was not the point of my post. The point was why these people, why now? Libertarians have been having tea parties for a while now and with a consistent theme. This year however a lot more people came, and the biggest and only really substantial difference I can see is that George Bush is no longer president and Barack Obama is. Conservatives were not protesting while Bush was president but now are rallying behind these Tea Parties, and I believe it’s more of a reaction against the man Barack Obama (or rather the idea of what Barack Obama represents to them) than to the differences between now and last April 15, or the April 15th before that. It’s this lack of consistency among the protestors that is what bothers me.

  2. About some of the things that you talked about:

    You’re right that the Federal Reserve isn’t an elected body, but those running it are appointed by elected officials (so if we as Americans care who runs the Federal Reserve we are more than welcome to vote people into office that will appoint those people) and it’s mandated in the constitution the right of the federal government to print currency. I think the government used the right balance of urgency and consideration with passing the stimulus bill. They did not drag their feet for months on end as the problem got worse, nor did they blindly sign a bill one day after a problem was announced. We elected these people to act and they did. Also, I thinking it’s unfair to equate “taxation without representation” with the “yet born.” No laws have been passed that set tax rates 50 years from now (for all we know, our economy could grow so strong that lower taxes could more than cover our deficit—it’s fallacious to say our current spending demands higher taxes later on). Plus since when do we represent people that are not citizens?

    About who receives the tax cut, a lot of these tax cuts function like tax credits, like if you buy a hybrid car, you get a certain tax credit, the purpose of which is to encourage people buying hybrid cars. Why is it ok to incentivized a person who pays taxes but not a person who does not? If the purpose is to get Americans to buy a hybrid car, why shouldn’t the tax credit apply to both? Also, a significant amount of those people who do not pay Federal Income tax live at a very low level financially, and I personally am ok with them not having to share in a tax burden that would break them and but not me.

    I think it’s misleading to throw around figures like the top 1% of income earners pay 40% of the taxes and to try to give the impression how grossly unfair that is. This is not a linear curve. The top 1% income earners earn way more than 1% of the money. It’s exponential and the majority of taxes come from them because they make the majority of the income. Even if everyone paid a flat % tax, the top 10% would still be paying the majority of the taxes, because the top 10% are making a heck of a lot more than the bottom 90%.

    You ask if we are taxing “those who produce” too much. But I believe that “those who produce” are still motivated to produce, even at a 39% tax bracket. Compared to the history of this nation, they are being taxed much, much less now than in the past. Our country has always been a country of producers, it’s what made us great, and we did that with higher taxes on the rich than now. It’s something the wealthy are very good at, making money. Of course that production is worthless unless there are consumers with money to buy.

    Overall though, I want to be clear that my point is why now? Our government has been spending money it doesn’t have for a long time now, and I don’t believe Obama has changed that, but I see a lot of conservatives protesting what he’s doing who did not bother when Bush did it. I imagine that if McCain had been elected, it would be mostly liberals protesting McCain and his spending. Everyone just seems to support their guy regardless, and I think it’s silly and bad for our country. We’ve become such a partisan country and it gets in the way of constructive dialogue. Instead of looking for “their guy to fail,” we should all look for our country to succeed. If the way to do that is through less government, less taxes, and less spending, then by all means let your voice be heard. But don’t just speak out when someone you didn’t vote for does something and keep quiet when someone you did vote for does it as well.

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