Taxes are a necessary evil. But their silver lining is that they foster a sense of accountability and reciprocity between the taxpayer and the tax collector. Indeed, democracy is usually born from this relationship. Widening prosperity brings a rising middle class, which in turn demands the rule of law, incorrupt bureaucracies and political representation in exchange for its hard-earned money. You might recall the phrase "no taxation without representation."
The one great exception is what development experts call the "oil curse." In countries "blessed" with oil wealth or similar resources, the relationship between the government and the governed gets distorted. These "trust-fund states" (author Fareed Zakaria's term) don't need taxes, so their rulers worry little about representation and accountability, opting instead for paternalism or authoritarianism. Worse, the people are less inclined to see government as their expensive servant and more as their goody-dispensing master.
Today, our politics seem to be suffering from a "rich people curse." We treat the rich like a constantly regenerating pinata, as if they will never change their behavior no matter how many times they get whacked by taxes. And we think everyone can live well off the treats that will fall to the ground forever.
Of course, typical wage earners pay plenty of taxes, but not in ways that foster a sense of reciprocity with the government in Washington. Their biggest federal payment is the regressive payroll tax intended to fund Social Security and Medicare. Even though, as a matter of accounting, these payments are no different from other taxes, they're sold simply as retirement and health insurance programs.
Meanwhile, Democrats keep telling the bottom 95 percent of taxpayers that America's problems would be solved if only the rich people would pay "their fair share" of income taxes. Not only is this patently untrue and a siren song toward a welfare state, it amounts to covetousness as fiscal policy.
I don't know what the best tax rates are, for rich or poor. But I'm pretty sure that it's unhealthy for a democracy when the majority of citizens don't see government as a service they're reluctantly paying for but as an extortionist that cuts them in for a share of the loot.
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