Just in time for tax season, the Senate has blocked the so-called Buffett Rule, which would have required households earning more than $1 million annually to pay an effective tax rate of 30%. The vote went off at 51 for and 45 against, which means it’s dead in the new, everything-will-be-filibustered Senate. Meanwhile, the party whose ideology naturally aligns with stalemate pushed its own bill to allow business owners to deduct 20% of their income next year—a plan whose benefits would go overwhelmingly to high-income households, according to the Tax Policy Center. Also meanwhile, I paid my taxes. I gave back 29% of my income from 2011, as compared with the Obamas’ 20.5% and the Romneys’ estimated 15.4%. I am the only person in this paragraph who is not a millionaire.
I could almost get my rate down to that of the President of the United States were it not for the Self-Employment Tax. Because I live by my wits—okay, I live by a Burger King, but I freelance—I am responsible for paying Social Security and Medicare taxes for both myself and my employer, who is also me. Essentially, I pay double FICA. In theory it works out the same as for everybody else, since my theoretical employer would theoretically subtract his share of such taxes from my pre-tax wages anyway. In practice, my work generates less money for me because I don’t have a boss.
You’re only a job creator if you do it for somebody else, apparently. The functional difference between paying the Self-Employment Tax and getting a regular W-2 is almost nil, but the impression is galling. The Buffett Rule is organized around effective tax rates, and this year I paid almost twice the effective rate of the richest man ever to run for President. The President himself, another millionaire who lives in a lovely old colonial that I pay for, also gives up less of his income in taxes than I do. These two men are locked in a vicious debate over how to create jobs.
Having created my own job, I languish. It is especially troubling that I languish in Social Security tax, since pretty much everyone agrees that Social Security will look different after the largest voting bloc in American history—which happens to qualify for it now and will for the next 30 years—is dead. I won’t get Social Security. I will pay double into it now and probably for another three decades, and then when I am old enough it will cease to exist. That’s the price we pay the Baby Boomers for inventing rock and roll.
So the Self-Employment Tax provides a concentrated version of the feeling I get from paying taxes generally. I am a single, healthy man who lives alone and rarely drives. I have no children in public schools. I rent, so I receive no homebuyer credit, nor have I taken any federally backed loans. My investment bank did not get bailed out, my plan to stick solar panels over all of Ben Fowlkes’s windows while he is away remains completely unfunded, and I have yet to benefit from the Asian land wars that have defined my adulthood. I don’t like cops. In short, I pay into a system I need less than almost anyone I can think of.
That’s fine. I would not take a 28% raise to live in a country with dirt roads and old people starving alongside them. All I ask is that Mitt Romney, who is so rich that he is insulated even from knowing that he is abnormal, cough up more than me. Fact: in a Hobbesian war of all against all, I would drink grain alcohol out of Mitt Romney’s skull. It therefore follows that he benefits more from tax-funded civilization than I do. He enjoys the advantages of an orderly society according to the needs of his many cars, and he should pay according to the abilities of his many bazillions of dollars.
Is that right? Does it punish Mitt Romney for his success? Maybe, but I would like to point out that I am advocating the compromise position, here. If taxes and the government they support were to evaporate, it would be me stealing from Mitt Romney and not the other way around. There are a lot more people like me than people like him—so many that we have to employ ourselves. Romney and the other millionaires in his party should consider what they’re getting out of the social contract before we do. The tax money they would have paid under the Buffett Rule isn’t class warfare; it’s the terms of the cease-fire.