Good news for a change

We’ll see.

The New York Times reports today that this initiative is headed for a resounding defeat at the polls. The tax-cut lie has gotten pretty deeply embedded in the public consciousness.

I wonder how many of the quotes in the post Henry linked to are correct. The Churchill quote is rather anachronistic, as well as being unsupported by any documentary evidence. (See here for more details.)

Funnily enough, that Churchill quote seems to be a favourite of the webby right, but the best guess as to its causal origin is Clemenceau. Sacre Bleu!

Confusion??? I understand the relationship between federal, state and local taxes quite well – part of my job after all. Indeed, I didn’t mention “tax cuts at the federal level” once in my post. If you want to argue that I’m confused, I would at least like to know why and how I’m confused (might help me unconfuse myself). It’s not at all clear from your post.

Back40: What in God’s name are you talking about? You seriously question that Grover Norquist advocates all tax cuts all of the time?

What ATR advocates is tax reform, especially a flat tax on both income and consumption. It also opposes waste, fraud and subsidy. Opposing tax increases is quite different from “all tax-cuts, all of the time”. As your quote shows you have misplaced the emphasis. You say “ATR opposes all tax increases as a matter of principle” when “ATR opposes all tax increases as a matter of principle” is a more accurate reflection of their stance. They claim that it isn’t increases that are needed so much as reforms which use tax revenues to better effect.

We have a huge problem with waste, fraud and subsidy at every level of government. The programs and people that need tax support are victimized by this just as much as those who pay the taxes. Efforts to simplify the tax code, shift the tax burden to consumption as well as income and provide individual exemptions high enough to protect low income earners seek to lower the total tax burden by reducing bureaucracy, waste, fraud and subsidy.

The key issue that can be sensibly debated is flat taxation versus progressive taxation.

Flat tax advocates maintain that taxes should be levied at an equal rate. Those who earn more will pay more and those who consume more will pay more. The tax rate must be high enough to pay for commitments. It promotes solidarity in that when you vote for a tax increase you must pay it yourself, all are equal. It also promotes scrutiny since people are less apt to turn a blind eye to waste when they have to pay for it.

Progressive tax advocates maintain that higher incomes should be taxed at higher rates but that consumption should be taxed at a low flat rate. The thinking is that a greater share of the tax burden should be paid by those who earn more and that except for special taxes on luxury goods they are not so taxed for consumption. This destroys solidarity by decoupling consumption from production of wealth. You can vote to tax others while remaining exempt yourself. It increases cynicism, evasion, and transactional friction in addition to inserting class conflict into governance decisions.

The cost of operating a progressive tax system greatly exceeds that of a flat tax system at every level, from tax law creation to individual compliance and every step in between. But it also resonates with the ideological views of class warriors who seek to homogenize society by taxing away what they see as excess income, by requiring those who benefit more from society to pay for those who benefit less.

Both sides have arguments and examples that they claim proves their case. Flat taxers love to point to Massachusetts, often called the People’s Republic of Massachusetts due to its ideological stance, as proof that a flat tax is well loved and successful. This view is disputed by some. Progressive taxers more often point to failure than success as part of advocacy for increased progressivity.

Abstracting out the tax reduction aspect of tax reform without also stating the structural cost reduction aspects misstates the intent and claims of reformers. This is politics as usual but not very useful discussion. Tax reformers see themselves as the good guys, the ones who have the best interests of society at heart and that their programs would result in higher standards of living for all. They may be wrong or the path to their better future may be too long and harsh to be feasible. This is all debatable but the debate often degenerates before the salient points are considered.

Having just gotten back from 2 weeks in Alabama, I can say that Governor Riley et al are doing a spectacularly bad job of selling this tax package. Despite the fact that many of the state’s religious leaders back it, none of the television ads being shown while I was there featured any religious leader. They did finally start running an ad featuring a former Auburn football coach, and Ruben Studdard was doing some free concerts in favor of it, but that’s clearly been too little too late. All the ads in favor of the plan also focused on its results in terms of more funding for education, never touching on the tax DECREASES for many of the state’s residents.

But then, much as I love Alabama and many of its citizens, as that American Prospect article points out, this is a state that only recently and not very overwhelmingly voted to legalize miscegenation.

Funny thing, IMO your descriptions are one sided Henry. You only admit to there being complexity in the issues and multiple objectives, such as waste reduction, when confronted.

When you say “They want to minimize taxes, because they want to minimize government power. There’s no ambivalence whatsoever” you conceal why they wish to do this, as if the horror of wishing to limit government power needed no explanation or justification. Their claims are that when taxes are no greater than required to accomplish agreed societal objectives that all members of society have improved lives. Where government institutions are an impediment to this objective then they wish to reform them. More powerful government doesn’t often mean better government.

ATR tax proposals have high thresholds that exempt low income people like those in Alabama from income taxation. It isn’t that they wish harm to poor people, they have different ideas on how to help them. By failing to state why they oppose tax increases and that they have alternative methods to solve budget problems you fail to contribute to the discussion.

I often suspect that better government is a secondary objective at best for political commentators. They get so wrapped up in their various ideologies that they lose sight of why these things matter. As the world fills up with people the days of thoughtless ideology seem numbered. Each day it becomes increasingly important that we do a more competent job of managing our affairs, that we pay closer attention to how real people and real societies thrive or wither as a consequence of management decisions. Doing the wrong things is wrong no matter how proud the wrongdoers are of their intentions, how right their reasons. We need to do a better job of choosing which methods to use and insist on those that do the right things for the right reasons while rejecting those that do the wrong things no matter what their reasons. Open debate about methods to help select those which promise better results is the responsibility of every citizen.

“Flat taxers love to point to Massachusetts, often called the People’s Republic of Massachusetts due to its ideological stance, as proof that a flat tax is well loved and successful. This view is disputed by some.”

Count me among the disupters. I can’t stand Massachusetts’ income tax system, and the relatively high overall rate isn’t the reason; I’m doing all right and I’d willingly pay more. It’s more the bureaucracy and the language it uses. Massachusetts Department of Revenue tax forms are confusing, ambiguous, and seemingly designed to trip up the people filling them out. I’ve always liked the IRS’s forms much more. Believe it or not.

The Massachusetts system isn’t exactly a flat tax; but it’s flatter than the national system. Nevertheless, it’s difficult to deal with. It brings some degree of progressivity in through the back door by such things as a higher rate for interest income than earned income, and a special deduction for home renters, which are more complicated to navigate than a simple system of brackets would be. It’s also bringing in inadequate revenue to fund the state… and the state recently came within a hair’s breadth of passing a ballot initiative to remove it entirely, despite the disaster that this obviously would have caused– that indicates how well-loved the system is.

Flat-tax advocates occasionally use the confusing nature of the tax code as a hook. But that’s really a bit of a shell game. The existence of tax brackets hardly complicates the tax code at all; for most people, it just changes the numbers in the table they look in to fill out one line on the 1040. It’s all the other stuff. I’m enough of a political cynic to think that, between good intentions, legitimate interests of fairness, and industry and interest-group lobbying, the other complications will keep creeping back in regardless of what people do to keep them out.