Where is the line between want and need? I ask because it seems to be a critical question when we discuss tax rates and taxation in general.

I was having a conversation with someone the other day and she took a very moderate position when it comes to taxation. “We shouldn’t be taxing people who genuinely need every dime they earn, but I don’t have a problem taxing people who have more money than they need.” Honestly, I find it hard to argue with that logic. It seems pretty reasonable to me. I vaguely agree, in theory.

But here’s where the conversation broke down: Where do we draw the line between need and want?

To survive, we really only need food, water, and protection from the elements. Pretty much everything after that is just a want. That said, we both agreed that that wasn’t enough. Neither of us were willing to believe that anyone who was better off than a homeless person living under a bridge who couldn’t afford more than KFC for lunch was taxable. You had to have, at the very least, an apartment, and a car, and air conditioning, heating, a computer, some kind of education, and maybe the ability to send your kid to daycare so you can hold down a steady job. We even agreed that a night out, even if it’s just dinner with friends, was something everyone really needs to be able to have now and then.

But no one really needs any of that. So where IS the line?

Value question: If everyone should make enough money to have a car, what kind of car is “needed” and what kind of car is just a luxury expense? You can’t tell me that a brand new Mercedes is needed. You can’t tell me that a 10 year old Ford is a luxury item. Now let’s say we’re talking about a 2 year old Honda Civic. Hardly a luxury, but also probably more than you need to survive. Are we taxing people who make enough to buy that particular vehicle?

Okay, now let’s flip the question a bit. Let’s say you can’t afford a car because your housing costs are too high. Or let’s say you can’t afford rent because your car payment is too high. Should we be taxing you because you make enough to afford your basic needs (I mean, it’s YOUR fault you made bad decisions) or should we take pity on you because you can’t pay your bills (I mean, if you get taxed to death, you’re going to get evicted or repossessed, or both!). Or worse yet, let’s say you live in an area with a higher cost of living – in the middle of a crowded city, for instance. You have to pay more than other people for your apartment and your car has to jump through more hoops to stay legal. Do you pay the same amount as someone who lives in the country where property is worth ten grand an acre and who can pass inspection with a pickup from the 1980s?

Can we safely rule out entertainment from people? I’m sure I’m not the only one who gets stressed out at work. If I didn’t head out with my friends or get a date with my girlfriend on a regular basis, I’d blow my brains out. Is that a want or a need? Should I be taxed more?

Now let’s say I go out to a decent restaurant instead of going for pizza. Am I in the tax bracket now? How about a nice restaurant? How about a 5 star sushi bar that serves Kobe beef and cocktails frozen in liquid nitrogen?

I deserve the right to drive out of town to see my family on Christmas. Do I need that or do I want that? How about Thanksgiving? Easter? Grandmother’s birthday? How about going out of town to see a friend? Going out of town to go to a concert with a friend? Going on a road trip? Flying out to New York? Flying out to New York for a week? Aspen? Flying out to New York to take a cruise to England and then pall around in Europe for a while?

Where do we draw the line? At what point do we say, “You don’t NEED that. You just want it.”
Assuming you can even come up with an answer to that question, assign a dollar amount to that lifestyle. Now do it for everyone in the country, regardless of where they live or what their family life is like or what their needs happen to be.

I’m not an unreasonable person. I do happen to think that we need taxes and that, yeah, some people are in a better position to sacrifice than others. I don’t think it’s fair to ask people who have nothing to give more to the government. But I don’t necessarily think that there is a right answer in all of this. It’s subjective and everyone’s going to come up with a different answer.

I tend to err on the side of caution. As someone that runs a conservative blog, I honestly believe we should tax as few people as little money to accomplish the most good without stealing from people and wasting public funds. Translating that desire and that agreement in principle into an actual system isn’t so easy.

Part of the reason tax increases are so burdensome is the choices the government has to make to get them to work. When you increase taxes, you have to pick a person, or a group, or a thing. Those taxes are going to hurt them. They’re going to affect the lives of others. Can they handle it? Are they burdened enough already? Is this going to be the proverbial straw?