Glenn Reynolds of Instapundit has a great rallying cry of “ending the Hollywood tax cuts,” as a way of raising the taxes on the Hollywood wealthy. And it is tempting, because if higher taxes on the rich is what the wealthy in Hollywood really want, then this is what they should get. On themselves. To hear the Hollywood rich tell it, rich people like them “don’t need tax breaks,” so it would only be fair to raise taxes on them.
But the issue is not only wealthy actors and producers who call for higher taxes. There are also wealthy academics, journalists, politicians, racial grievance hustlers, former presidents -- the list goes on and on -- of people who are wealthy, calling for higher taxes of wealthy people, and identifying with wealth of those whose taxes are to be raised. The added identification with those whose taxes should be raised is a cheap, easily-virtuous element in an argument that adds credibility and virtue at the same time, thus advancing the argument. Those of us who oppose it would correctly define this tactic as sanctimonious malarkey.
There is also an element of a bluff when a rich person calls for higher taxes on rich people like them. A person making such a call knows that there is no way the tax code could be changed to specifically target their own individual tax rate, so it is a cheap and inexpensive feel-good proposal. They know that their bluff will never be called.
Well I say it is high time we call their bluff. I hereby propose the Sanctimony Tax. This is a new tax that even Grover Norquist could support. Or if he opposes it, he would seriously consider it for a few minutes before opposing it.
Here is how the Sanctimony Tax would work: anyone who openly calls for a higher tax rate for people in the top tax bracket, and then also identifies with the top tax bracket, will be subject to a surcharge on their current calendar year’s federal income taxes. The specific surcharge rate could be decided on by Congress, but I would suggest an additional 10%, at the least.
One example of the Sanctimony Tax in action would be a wealthy Hollywood actor who calls for higher taxes on rich people, then holds himself out to be rich so we should take his word for it. This rich person would see his federal tax rate go from 36% to 46%, in addition to the now-higher California state income taxes. Or take the Princeton University professor who also has a well-paying gig writing columns for the New York Times. If that winner of life’s lottery calls for higher taxes on the wealthy like himself, his federal tax rate would go from 36% to 46% -- still not the ideal 91% tax rate Prof. Krugman wrote so longingly of a few weeks ago, but still.
The Sanctinomy Tax would not apply to people who call for taxes on rich people in the abstract. Also, a poor or middle-income person could call for higher taxes on rich people and they would not be subject to the added tax. It is only the wealthy person who openly calls for higher taxes on wealthy people, and then identifies themselves as a wealthy person whose taxes would go up under the proposal. When a wealthy person suggests higher taxes on the wealthy, the phrases to watch for are “people like me,” “those in my situation,” “take it from me,” or, my favorite, “my secretary pays a higher tax rate than I do…”
That person would be subject to the Sanctimony Tax, the reason being that with their cheap sanctimony they have poisoned the public debate on the subject of taxes, so the general public should be recompensed.
There are some other features of the proposed Sanctimony Tax that will help its adoption. Rewards could be offered for people who successfully report others who call for higher taxes on wealthy people like themselves but don’t voluntarily pay the Sanctimony Tax. And the government could even earmark Sanctimony Tax revenue to go to children’s programs (which would allow the funds already going to children’s programs to be diverted to pay for other essential government services). How could anyone oppose that?
And if you think this would be a violation of the taxpayer’s free-speech rights, because they will get a higher tax rate based upon the content of their speech, save your breath. This is a tax, which attracts minimal scrutiny from the Supreme Court. Just last summer the Supreme Court held that forcing citizens into a contract so that the contract could be regulated was not a violation of the Contracts Clause. The Sanctimony Tax, being a tax, would receive the same pretzel logic, end-results lack of scrutiny from the Supreme Court. Chief Justice John Roberts would want to steer the Supreme Court clear of this controversial issue, so the constitutionality of the Sanctimony Tax is in the bag!
Now that we have that settled, we need to look into enacting a corporate Hypocrisy Tax for corporations like Apple or Google, that closely align themselves with tax-raising candidates and then hide their corporate profits off-shore. A corporate Hypocrisy Tax would also be applied to entertainment companies made up of liberals who film their movies in Canada because Canadian taxes are lower. And that brings us back to Hollywood, which, Glenn Reynolds is right, really needs to have its taxes raised.