Why politicians hate taxes

By Felix Salmon
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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Comments
5 comments so far

So I guess this means that Democrats *generally* do things because they are the right things to do, but Republicans are *typically* nothing more than populists.

Posted by GRRR | Report as abusive

American’s viceral dislike of taxes hasn’t always been there. Not like today.

During the Great Depression and 1940s and 50s and perhaps the 60s, there was a kind of unity, a sense that we are in this together.

Part of that no doubt had to do with the fact that public spending was plainly and undeniably for the broad public. National parks, bridges and dams, World War II, the interstate highway system, the Space program, these were all things that people of all stripes could be happy about.

Today there is a real sense that government spending is no longer buying goods that benefit everyone, but is rather just taking from one group and giving to another. And that sense is correct: most of government spending is now transfer payments of one type or another.

It is plain to me that the best type of Keynesian spending in 2008 would have been spending on real public goods like the old days. Plenty was available: new energy sources, improved conventional energy, better infrastructure, medical research… Unemployment would have dropped, and best of all there is something to show for all your spending.

Posted by DanHess | Report as abusive

Polls overwhelmingly showed that the public’s main focus was on jobs and that they favored letting tax rates go back to Clinton levels for those making over $250,000/year. That didn’t have any effect on Republicans.

They care about polls when the polls agree with them.

Posted by 3oosion | Report as abusive

Felix –

You have got to be the most partisan blogger out there. As if Democrats sit aren’t driven be political pandering. It cuts both ways. I agree that a hard line on taxes does not help the fiscal situation. And yet…

Entitlement spending is completely out of control with a structural deficit as far as the eye can see and what does Obama do? Implement the largest new entitlement in American history! Gee, no pandering there.

The Republican’s budget plan actually grips the third rail of entitlement spending. Democrats take the politically saavy tack of having **no plan** to deal with the vast deficits and merely let the Republicans twist in the wind for taking the first steps.

Posted by DanHess | Report as abusive

I like this link (http://truthout.org/actually-rich-dont- create-jobs-we-do/1305380742) on the subject of Actually, “the Rich” Don’t “Create Jobs,” We Do. It talks about the Ayn Rand influence on taxation. I don’t agree with a statement in this linked article about taxes being based on revenues minus costs. We have plenty of regressive taxes that hit lower income folks harder than the wealthier (payroll taxes, sales taxes, “use” taxes, as in the use tax in currently state income tax free Washington state), which is why I think income taxation should be much more progressive than it currently is, to make overall taxation progressive. Bill Gates Sr.’s campaign to introduce a WA state income tax would have done away with the use tax, which is a tax on the depreciated value of business assets, whether they are earning you income or not. The devil is in the details, and I’m not at all sure that his good intentions would be properly executed, but I think Mr. Gates was on the right track.

Posted by Weevie | Report as abusive
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