Two snippets from recent news items caught my eye. First, the April 24, 2006 issue of Business Week includes an article, “Flight of the Investor Class: Defections are Endangering the GOP’s Hold on Power” (p. 34), which says that many investors, though disillusioned with Republicans, are “skeptical that Democrats would do any better on economic issues. ‘They have the same old, tired socialist message: no tax cuts for the rich,’ says Norman Bush, 63, of Cranberry Township, Pa.”.
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Second, a Washington policy group called GalleryWatch quoted House Resources Committee Chair Richard Pombo as follows: “Congress should open ANWR, put ‘Big Oil’ to work increasing American supplies to lower prices, and generate massive new tax revenues at the same time. How could tax-hungry Democrats say no to that?” (Interestingly, when I tried to see if other news organizations had quoted Mr. Pombo’s remarks, my Google search revealed that “tax-hungry Democrats” and “tax-hungry left” have been used a number of times over the last few years by conservatives commentators. The echo-chamber is as powerful as ever, I guess.)
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These two quotes are, of course, easy targets. I don’t know who Norman Bush is, but it is surely not difficult to find people who are so ill-informed or confused that they think that Democrat and Socialist are perfect synonyms or that “no tax cuts for the rich” is a key element of Socialist thought. And accusing Democrats or liberals of being “tax-hungry” is no more than old-fashioned name calling and is thus designed to distort reality. It is somewhat pathetic that people think and talk that way, but there are worse offenses in the political discussion than these inane morsels.
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What is the fundamental point of disagreement, though, between liberals and conservatives regarding taxes? I obviously do not believe that liberals are hungry for tax increases, though we generally do oppose tax cuts for the rich. Even so, I’d be as happy as anyone to learn that it was possible to decrease taxes across the board without undermining other important goals that I hold dear. Both conservatives and liberals would like to live in a world with lower taxes, but liberals do not think that we currently can afford to do that, given other needs. Conservatives apparently think that those other needs are simply less important than lowering taxes.
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If that’s true, then we need to recognize that neither conservatives nor liberals typically offer a complete description of what they are aiming toward. Conservatives argue for lower taxes so vehemently and so relentlessly that it is difficult not to conclude that they think that the only good tax rate is 0%. (But why stop at zero? If zero tax is good, wouldn’t negative taxes be better?)
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I am willing to believe, though, that there are conservatives who do not believe that the tax rate should literally be zero but who are willing to smile and applaud the usual Republican tax-cut rhetoric because they believe that we should at least be moving in that direction. Still, I have yet to hear or read anything from a conservative describing the end to which this would all lead, if they had their way. Clowns like Grover Norquist become famous by talking about shrinking government until it is small enough to be drowned in a bathtub, but if there is something in print that tells us where conservatives would like to stop cutting taxes, I’m not aware of it.
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As I said above, though, liberals are also guilty of talking more about directions than about end points. I argue regularly for greater progressivity, but I have never stated publicly exactly how progressive I would want the overall tax system to be. (I won’t do so here, either, though I’ll at least offer a starting point to think about the issue.) Arguments for greater progressivity thus might end up, I concede, inadvertently opening up liberals to satirical accusations that they wish for ever-higher taxes.
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Here are a few preliminary thoughts on the question of the ideal level of progressivity in the tax system. Most importantly, the starting point should be how to bring up those at the bottom of the income spectrum. Reaching the point where no one has to choose between buying food or medicine for their kids seems a worthy goal for public policy. Egalitarianism, for me, begins not with a desire to shrink the distance between rich and poor but with a desire to end deprivation of basic needs. (Yes, there is plenty to debate about the content of “basic needs,” but this is a start. And there is no reason to get into a debate about whether DVD players have become a “basic need” before we could agree that basic needs should be the starting point of fiscal policy. Line drawing exercises are secondary or tertiary concerns.)
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If we could create a world where even the worst-off person was not likely to die of an easily preventable disease, then tax analysis would change. Progressivity still has its appeal, mostly on the basis of ability to pay; but that appeal is much less emotionally compelling than when we are literally talking about taking away diamond necklaces to pay for childhood immunizations. Should we care whether someone with an income of $400,000 pays more or less proportionately in taxes than someone who earns $200,000? Sure. But if someone told me that the tax system could finance basic needs with a rate structure that flattened at $200,000, my moral outrage meter would not be red-lining.
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None of this, of course, is philosophically new. It can almost all, I have no doubt, be found in Rawls or in the writings of his many interpreters/disciples. Still, it is important at times to stop and think about where we’re really trying to end up, rather than the basic direction in which we want to move. When liberals say: “More progressivity!” and conservatives say, “Reduce taxes!” the discussion too quickly degenerates into exaggeration, misrepresentation, and parody.
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I hasten to add that conservatives are clearly at much greater fault than liberals in the distortion game. Unlike Jon Stewart -- whose basic take on all issues seems to be “The Right is wrong, but so is the Left; so why can’t we normal people in the middle have a say?” -- I don't believe that both sides being imperfect means that both sides are equally wrong. Both sides distort, but conservatives are the champions of distortion and dishonesty in the tax rhetoric game. (Of course, I would say that, wouldn't I?)
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Still, for the part that I can play, I can at least start by acknowledging that the tax rhetoric on the left leaves out a big part of what I really care about. I’d rather help those at the bottom than worry about, say, the relative tax rates of the upper-middle versus the upper-upper-middle classes. If I can create a system that has rising marginal and average rates throughout the income distribution, then that is a good next step after taking care of the poor. Distributional analysis is interesting and important, but it is not the basic point. The liberal cry for more progressivity is perhaps best thought of as short-hand for: “First, help the poor; then, set tax rates based on ability to pay.” It’s crude, and it’s only one liberal’s take on liberal tax policy, but it’s a start.
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Neil H. Buchanan, guest blogger
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