The Cognitive Dissonance of the Anti-Tax Crowd
by tgirschMay 2nd, 2006
Or, “The Inter-Blog Pissing Contest Continues”
This past weekend, SayUncle was griping about us taking him to task over his near-universal opposition to all things tax related (and, in this particular case, the estate tax). Quoth Uncle:
See, when I express opposition to some random tax (of which there are thousands), I am also required by, err, I dunno what to come up with a way to pay for crap that might otherwise be funded by the taxes I oppose. In other words, I should be glad to be taxed and thankful for our infrastructure. Or damn the taxes and the infrastructure. What Kevin doesn’t seem to grasp is that I oppose taxes only slightly more than I oppose a bunch of crap the .gov wastes money on.
Actually, that’s not at all what we require of him. But his attitude here is typical of the anti-tax crowd, so I’m going to generalize here a bit to address it.
Nobody’s asking that you fall into the false dichotomy Uncle falsely attributes to us. That is to say, nobody says you must favor all taxes and spending, or that you must oppose all taxes and spending. What you must do [if you expect to be taken seriously], however, is at least make an effort to bring taxes and spending into balance, and you cannot put the cart before the horse in doing this.
See, here’s the problem: the anti-tax crowd knows that it’s easy to get sympathy from people by railing against the “evils” of taxation and, at least in the general sense, of “excessive government.” The problem is, as soon as these folks start drilling down into the particulars (e.g., what specific programs would be cut in order to bring down spending and thus lower taxes), they lose. And they know this, so they expressly avoid drilling into the particulars. When pushed, they’ll gladly give a laundry list of those spending programs they oppose, and these programs generally fall into either of two categories: programs that are too small to make a noticeable difference (e.g., some half-million dollar local pork program), or programs that are wildly popular (e.g. Social Security and Medicare). But they never explain how they’re actually going to get the voting public to agree to such program cuts (because they can’t), much less how they’d actually implement them.
When taxes and the programs they pay for are directly tied together, most people prefer to pay the tax and keep the program, rather than to lose the program and be spared the tax. Given a choice between a balanced budget or a tax cut, people choose the balanced budget by a two-to-one margin.
This is not what the anti-tax folks like to hear. And that brings us to their dirty little not-so-secret: Getting the types of tax cuts that they favor would require either cutting these large-but-popular programs, which simply isn’t going to happen; or throwing the budget wildly out of balance and saddling future generations with untold debt, which is what happens. Their distaste for taxation is so great, that fiscal responsibility is completely abandoned in their anti-tax crusade. Pragmatism has no place for these true believers. They can’t convince the people and/or the congress to cut spending in the ways they’d like to see, but this doesn’t deter them from pressing on in their quest to vilify and avoid taxation at all costs. As a result, you get the wildly irresponsible “starve the beast” approach, built on lies (like the ludicrous “supply-side” economic “theory”), that the anti-tax lobby actively pursues.
To be fair, the other side of the debate often isn’t much better — they, too, have a tendency to try to downplay the tax implications of social programs in the public mind. But it’s not nearly so prevalent nor so egregious as what the anti-tax crowd does, and it’s largely directly because of the way in which the anti-tax crowd has successfully disconnected taxation from spending in the public debate.
Bringing this back around to Uncle, this is why we find his position so frustrating and so irresponsible. It’s not that he supports reducing taxes but doesn’t support reducing spending. It’s that he (apparently, at least) supports reducing and eliminating various taxes even if spending isn’t cut to match, and even if doing so wrecks the budget and/or explodes the debt. In other words, it may be an overstatement to say that he doesn’t care at all whether or not the government is fiscally responsible, but it’s certainly fair to say that his aversion to taxation is more important to him than any sort of budget discipline or financial responsibility. If he can’t get the spending cuts he wants, he still advocates cutting taxes anyway. Maybe he’ll close his eyes, clap three times, and hope it all works out.
UPDATE: Uncle responds, essentially saying that since he’s not a politician, he can advocate any irresponsible policy he wants to without having to worry about whether or not it makes sense or has any negative consequences.
tgirsch, I fail to understand why those who advocate more spending are less guilty of the sins of which you accuse uncle. From now on, any time you back a concept that will cost the government incremental dollars, are you willing to identify which tax you will increase to pay for your program?
I don’t know the history here, all I am aware of is uncle voicing opposition to a specific tax based on his perception of that tax being unfair.
I feel compelled to disclose that, in my opinion, the most recent round of income tax cuts were horrifically irresponsible given they were not accompanied by at least a one-for-one cut in spending (I am ignoring the qualitative nature of the cuts). We are now in a position where if we have a big jump in inflation and interest rates skyrocket, the cost of debt service is going to swamp the federal budget. Not a sound fiscal place to be.
Ted:
From now on, any time you back a concept that will cost the government incremental dollars, are you willing to identify which tax you will increase to pay for your program?
Generally speaking, yes. As an example, I echo Thomas Friedman’s support for a $1/gallon additional gas tax, with the proceeds funding efficiency research and alternative energy resources, to reduce our dependence on foreign oil.
More generally, I’m on record (and am going on record again) supporting the idea of tying financing to initiatives. If you want a new spending program, you have to explain how you’re going to pay for it. If you want to cut taxes, you have to explain what you’re going to cut in order to free up the revenue.
I supported the idea of a balanced budget amendment as proposed by the GOP in the mid 1990’s. (Although I’m not sure I totally agreed with their particular implementation, and I do concede that there are times when limited-term deficit spending can be appropriate and prudent.)
Of course, not every new spending program necessarily requires a tax hike, nor does every tax cut necessarily require a spending cut, but you have to make the budget balance, and you have to have a contingency plan in case the budget doesn’t work out as expected.
It’s my belief that we could accomplish a great deal and even expand certain social programs without either cutting current programs or increasing taxes substantially, simply by improving efficiencies of certain existing programs. Medicare is a mess, in large part because of the protectionist clauses written into the law — get rid of these, and you could likely expand coverage while simultaneously reducing cost, for example.
But I don’t advocate putting that cart before the horse. The first order of business has to be getting the budget back in order; then you can look at taking advantage of some of those improved efficiencies.
In that case I’m in your corner.
No tax cuts for you, unless you are obscenely disgustingly rich and don’t need it.
[...] Tom takes me to task for not demanding ways to cut spending for tax cuts I support, or something: Nobody’s asking that you fall into the false dichotomy Uncle falsely attributes to us. That is to say, nobody says you must favor all taxes and spending, or that you must oppose all taxes and spending. What you must do, however, is at least make an effort to bring taxes and spending into balance, and you cannot put the cart before the horse in doing this. [...]
Why does anyone have a hardon for the estate tax?
It’s a tax on everything, over some arbitrary allowance, that someone has accumulated with after tax money. The poor dead bastard has already paid tax on the money used to purchase the “estate” and likely paid property taxes on some of the “estate.” Go ahead and tax any tax deferred accounts but why tax somone for bad luck.
I don’t want my estate taxed when I die because I want the NRA and JPFO can get the full value of my estate.
Marc:
First of all, it’s not double taxation — money is usually taxed when it changes hands.
Second of all, you can protect up to $2 million of your estate from taxation, so unless you’ve got a LOT of money to give to the NRA and JPFO, I wouldn’t worry.
Third of all, the JPFO is a 501(c)3, so anything you leave them would be totally exempt from taxation, separate from the up to $2 million you can otherwise protect.
But in this case, my beef with Uncle isn’t just over the estate tax; it’s over taxation in general.
Tgirsch, technically, I believe the estate tax is double taxation. The estate is paying the tax, not the recipient. Transaction taxes are typically levied against the purchaser, not the seller.
And isn’t it a bit absurd that Marc can avoid taxes by leaving his money to JPFO instead of his children? That aspect of the law is indefensible, IMO.