The Medal Tax

Latest column is about President Obama’s absurd endorsement of Marco Rubio’s absurd bill to exempt prizes won by Olympic athletes from taxation.

For the deep cuts, let me say that I think it’s particularly dangerous for liberals to get into this game. Obviously the specific revenue implications of this bill are small. But the framing around it is deeply right-wing. The idea is that taxes are a kind of penalty, and that we shouldn’t be penalizing these worthy athletes for their efforts. But by that token we shouldn’t be penalizing the people who invented Gmail or founded Papa John’s or earn a living driving a long-haul truck or making beds at the motel or designing marketing materials for Sabre printers. The typical way to make money is to do some work that some other people find valuable enough to pay you for. It is also possible to make money doing things that are socially destructive, but the sensible response is that really destructive activity should be banned or regulated into productive channels. The end point of this line of thinking is that basically nobody should be taxed for anything. Which is a fine a conclusion for Marco Rubio, but a bad one for Barack Obama.

To pull out of the spiral, you have to start with the idea that taxes aren’t a penalty; they’re a way of raising funds for valuable public services. This seems like a natural thing for liberals to say, but Obama has tended to cast it aside to an extent in his zeal to exclusively tax the rich and it would stand in the way of the aspirations of the Nick Rahalls of the world to use public services as a source of make-work jobs rather than as a source of valuable public services. That gets you back in the world of tax moralism and the question of should we really make our noble Olympians pay.