Why politicians hate taxes

May 13, 2011
Ezra Klein wonders what the intellectual justification is for hating on taxes; my question to Ezra is why there needs to be one in the first place.

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Ezra Klein wonders what the intellectual justification is for hating on taxes; my question to Ezra is why there needs to be one in the first place. Sure, it’s always nice if a politician can point to an economist or two to provide some pointy-headed backup for his policies. But it’s hardly necessary. Remember that Hilary Clinton, one of the more intelligent and sophisticated politicians in the country, was happy to say that “I’m not going to put my lot in with economists” when she was challenged on the fact that none of them were buying in to her silly idea to suspend the gasoline tax.

Ezra’s fixated on economic growth as the goal which politicians are aiming for. But that’s not the goal at all. The real goal is the same as it’s always been: to get re-elected. And if you want to get re-elected in America, a hard-line stance against any kind of tax hike looks entirely rational.

This doesn’t mean that people like John Boehner are lying when they say that it’s better to risk a federal default than it is to raise taxes even a little bit. It’s just that incentives matter. And the kind of people who believe those things tend to do quite well in today’s Republican Party — especially since the Tea Party became a serious political force.

Americans, in voting for politicians who run on a hard-line anti-tax-hike policy, are not acting in their own best interests. But the politicians, on the other hand, are.

Steve Waldman wrote a great post examining this situation back in January — the Republicans are much better at surfing the tide of public opinion than are the Democrats, who are more likely to push the kind of policies which they think make the most intellectual sense.

The only thing you need to understand the Republican position on the debt ceiling is this number: 47% of Americans oppose raising the debt ceiling, while only 19% support it. Republicans will vote no on this for the same reason that they voted no on TARP — politically speaking, doing so makes all the sense in the world.

When asked why they’re voting as they are, they could simply cite the will of the people, which is quite a good reason in a democracy. Others will attempt some kind of economic justification. But an appeal to economists was never particularly compelling even before the crisis; now, it’s pretty much worthless. A political party trying to win election on the basis of “economists love us” is never going to get very far.

Still, this debate does make me chuckle a little, coming as I do from an emerging-markets background where one of the most common complaints of economists is that taxes are far too low. Look at Mexico, or even Greece for that matter: the fact that most people don’t pay taxes is extremely corrosive to both civil society and the public fisc. Politicians who try to drive us towards that state of affairs are being highly irresponsible. But highly irresponsible politicians can do very well, from time to time.


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