Acton Commentary

Tax Cuts and the Triple Crown


While the U.S. Congress debates tax cuts, the New York-bred gelding Funny Cide is poised to win horse racing’s holy grail, the Triple Crown. There is, of course, no intrinsic connection between these two events except synchronicity, but they do trigger an interesting chain of ideas.

No gelding has ever won the Triple Crown. Whatever the complex biological and hormonal reasons might be for this, one thing is certain: Should Funny Cide win the Triple Crown, he will not, like the renowned colt Secretariat, for example, sire a succession of horse racing greats. Reflecting on that fact reminded me of C. S. Lewis’s line about modernity’s rejection of God and natural law in The Abolition of Man : “We castrate and bid the geldings be fruitful.”

And now on to taxes. At the heart of the debate about taxes is the contention that higher taxes stifle economic activity and in fact lead to less government revenue, while tax cuts increase available capital, stimulate economic growth and thus—lower tax rates notwithstanding— actually increase revenue.

As always when dealing with large and complex economic realities, there is a fine balance that must be achieved. Tax rates of 0% will be highly stimulative but generate no government revenue; tax rates of 90+% are theoretically great revenue producers but 100% of nothing is still nothing. Finding the marginally appropriate rate is a matter of prudential fine-tuning and legitimate economic and political debate.

What is so depressing about the current discussion is that this is not the debate that is taking place. Instead, we have one side demonizing the very idea of tax reduction as favors to the rich and an act of hostility to the poor. Undoubtedly, this kind of political partisanship is calculated to appeal to certain interest groups. Pitting groups against each other and purportedly taking the side of the marginalized and oppressed against the powerful and wealthy score political points with some and thus have an electoral payoff. Forget the fact that class warfare seems so out of touch with the realities of American life; there is something even more profoundly disturbing about this tactic. And it has to do with geldings.

Geldings cannot “be fruitful and multiply.” And here we have the mental block that characterizes a gelded worldview. By a gelded worldview, I mean a worldview that is incapable of conceiving the very idea of being fruitful and multiplying. Applied to economic life, a gelded worldview sees all wealth and prosperity as the “fruit” of plunder and theft. Justice—usually defined as “social justice”—then, requires redistribution of wealth (by progressive tax codes, for instance). Reduction of taxes is then a matter of injustice, rewarding the rich who stole it in the first place. The attack from the left-wing of the Democratic party in the U. S. Congress today, is, I submit, a reflection of such a gelded worldview.

The reality of economic life is quite different. Wealth and prosperity are not givens; they are the fruit of human ingenuity, creativity, risk, and hard work. To be sure, there are instances of plunder and theft among the powerful barons of industry. But to define the entire economic order of a free society in terms of robbers and the robbed is to miss the engine of economic industry and growth that defines American and Western prosperity. It is to look at the fecundity of our economic life from the point of view of the gelded. If C.S.Lewis was right—if modernity itself in its rebellion against God’s order in the name of human autonomy is a gelded reality—then the remarkable economic growth of the last 200 years in the free societies of the West, is itself a providential counterweight to the act of gelding that is the modern revolt against God.

I will be cheering hard for Funny Cide to win the Belmont Stakes and capture the Triple Crown. One cheer for one gelding; no cheers for the geldings whose worldview and economic policies would stunt the fruitfulness of our economic prosperity. That prosperity is not for the few; it is the hope of the many not just on this continent but around the world.