15 April 2009

The Ides of April

Wuerker, 15 Apr 09 (resized)Justice Holmes remarked that taxes are the price one pays for civilization. Given the last eight years in the White House,1 not to mention the 1980s, it's not ironic at all that the Heffalumps want to reduce taxes: They want (and achieved) less civilization.

This leads to another inquiry, though. It's really tough to object to "I need to keep more of the money I've earned and pay less taxes"... until one starts to consider the alternatives. The real problem is that the Heffalumps largely disbelieve in the economic concept of public goods, which include such silly things as roads, military expeditions to foreign nations, courts, and control of contagious diseases like tuberculosis. And, conversely, they refuse to acknowledge the free rider problem, such as Bernard Madoff. Leaving those problems aside, what is the realistic alternative to taxes, and in particular income taxes?

For those who think there's some real alternative, keep in mind that the "income tax" is a recent phenomenon, linked to increased diversity of capital ownership and the concept of labor economics. Eight hundred years ago in England, or for that matter in China, there was no income tax... primarily because the vast majority of the population had no income. Instead, the majority of the population lived as feudal tenants.2 If one has any conception of the veil of ignorance at all, this is simply not an acceptable alternative... unless, as the Right is, one is convinced that real ignorance is an adequate substitute.

The problem isn't with taxes per se; it is with "value for money." And that is not a structural problem, but an insoluble policy problem. The irony that the people who can most afford to devote their efforts to the policy debates while giving their (supposed) nineteen to the taxman are those who scream the loudest — and, conversely, get the most non-accountable benefit from public goods, and therefore are the free riders — points out that not all self-interest is very enlightened.

  1. <SARCASM> Now, unofficially, the Half-Black House, or perhaps the Half-of-Three-Fifths-of-All-Others House. After all, the Right is fond of claiming that everthing said by Liberals is a euphemism intended to prevent communication, so we should call it like it is. Or look up "teabagger" before using it as a slogan... although that particular source is admittedly well outside the ability of the (dis)organized Right to consider. <SARCASM>
  2. Yes, I know that the Chinese system was technically somewhat different, but economically it makes no difference.