The Rich Pay Too Little in Taxes, Unless They Pay Too Much

Greg Mankiw, an energetic blogger (you may have heard of him? he teaches econ at Harvard? and used to advise President Bush?) wrote a super-compelling piece in Sunday’s New York Times, whose headline says it all: “Fair Taxes? Depends on What You Mean By Fair.”

It is about taxing the rich, and begins by explaining why Warren Buffett can afford to always complain that he pays a lower tax rate than his secretary: most of Buffett’s income is derived from dividends and capital gains, which are taxed at only a 15% Federal rate, as opposed to a Federal rate more than twice that for ordinary income, bonuses, etc.

Soon after, the article becomes more of a philosophical discussion about the rich and taxation, and it is well worth the read. Even more interesting are the comments about the piece on Mankiw’s blog.

But perhaps the very most interesting thing about the Mankiw piece is the lead: “Do the rich pay their fair share in taxes? This is likely to become a defining question during the presidential campaign.”

This is a classic in winking understatement, for Mankiw was not only an advisor to Bush, but is also (as duly noted in the bio on his piece) an advisor to Mitt Romney on Romney’s current campaign.

I applaud Mankiw, the Times, and Romney for having the courage to produce what is essentially a position paper on taxation in the pages of the Times. As long as everyone’s cards are on the table, which they are here, I see no harm. But I sure would have liked to see the e-mails back and forth between the Mankiw and the Romney camp as the Times piece was being edited; and it sure will be interesting to see how this trenchant piece of tax commentary plays out in Romney’s campaign. I can just imagine one of his opponents whipping out the Mankiw article a few weeks or months from now and waving it in his face — “So the rich pay too much tax, huh?”