In Defense of Taxation

In his novel Pale Fire, Vladimir Nabokov describes an imaginary country where, under the guidance of a wise and benevolent king, "Taxation had become a thing of beauty. The poor were getting a little richer, and the rich a little poorer...."

Nabokov was no socialist, yet the passage has a wistful idealism to it that must read like pure fantasy to modern Americans. That sense of fantasy, it seems, reflects two connected realities: first, the ongoing, and increasingly successful, denigration of the political philosophy underlying progressive taxation, and second, the recognition - but unfortunately not always great regret - that disparities in wealth are increasing. To describe the U.S. today, one would have to revise Nabokov somewhat: "Taxation had become a thing of horror. The poor were getting a little poorer, and the rich a little richer...."

The political debate regarding taxes in this country has gotten so lopsided and regressive that one listens long and hard for voices of moderation, enlightenment, and courage. No elected official, of course, calls for "higher" taxes; they'd be voted out of office at the next opportunity - if not immediately hauled out into the street and shot like an animal. With almost perfect unanimity, American politicians agree that taxes need to be "lower," and the argument, thus framed, then moves on to the magnitude and the variety of the contemplated tax cuts.

At first glance, this situation would seem to reflect the famous antipathy of Americans to central government, their rugged individualism, their fierce refusal to be trod upon, and so forth. Such feelings, as Alexis de Tocqueville long ago noted, naturally arose in a democratic country where resistance to tyranny constituted the central creation myth and where all individuals were held, at least in theory, to be equal. Yet de Tocqueville also recognized that in a state of social equality, personal independence could also generate a sense of individual powerlessness, and that this "debility" promoted a belief in the importance of centralized power:

"His [the American's] independence fills him with self-reliance and pride among his equals; his debility makes him feel from time to time the want of some outward assistance.... In this predicament he naturally turns his eyes to that imposing power [the government] which alone rises above the level of universal depression. Of that power his wants and especially his desires continually remind him...."

We do not have to agree fully with de Tocqueville's rather stark portrayal of Americans in order to appreciate the wisdom of his observation. At the very least, that wisdom advises us to resist the temptation to ascribe American anti-tax sentiment to some deep and monolithic anti-governmentalism in the national character. There are causes closer at hand.

More immediately and directly, the modern anti-tax consensus reflects the success of conservatives and the far Right in framing the debate, simplistically and misleadingly, as a contest between "higher taxes" and "lower taxes," and thus between "bigger government" and "smaller government." Moderates and progressives, meanwhile, have been much less successful at defining the issue as the kind of society we want to live in, or as the ability of the government to help people, or as the importance of pooling our resources in order to achieve shared goals. That's a shame, for in the process, the Right has co-opted the populist mantle in order to enact policies that do not in fact benefit the majority of Americans.

Those concerned about excessive tax cuts need to make two related arguments, and they need to make them loud and clear. The first is that the Right's anti-government campaign, packaged as "tax relief," is NOT just about reducing taxes - it is aimed at eliminating progressive taxation, and will actually increase the tax burden on the non-wealthy. The second is that the underlying philosophy of progressive taxation is populist by its very nature. Let's take these one at a time.

What middle-class and working-class Americans need to understand is that, under the current administration's tax cuts, they are paying a higher proportion of the total tax burden on the public. They may be paying less in absolute dollar figures than they were in 2000, but the wealthiest Americans have been granted an even larger tax reduction (the best word is probably "bonanza"). So by definition, a greater proportion, a greater slice, of the overall tax pie that the government collects is being paid by the rest of us - and it is the rest of us who most depend on the various government programs and services that taxes pay for. To borrow a term from the 2000 election, that's the real "class warfare" taking place in the United States today.

But the whole idea of a graduated tax policy is based not only on the idea of redistribution (i.e., helping those in lower income brackets), but on the recognition that those in the upper brackets will themselves benefit from a system in which a larger number of people are able to participate fruitfully. How so? First, the greater revenues generated by a graduated tax policy help the government avoid excessive debt and deficit spending (emphasis on "excessive," because some red ink may at times be good for the economy) - and, as the 1990s demonstrated, federal solvency encourages private and foreign investment in both traditional and cutting-edge industries. Secondly, a graduated tax policy gives the government the resources to provide services, such as education and health care, to people who might not otherwise be able to afford them - and the education and health of these people are prerequisite to their productivity as employees. Thirdly, the government can more effectively build and maintain smoothly functioning transportation, energy, public safety, law enforcement, and information infrastructures, without which no business could hope to achieve its full potential.

This side of the debate, incidentally, is completely independent of two other central arguments made against taxation and government spending: first, that the government does not spend money efficiently, and secondly, that much of the money goes toward funding undesirable programs. Each of these arguments is itself vulnerable to criticism, but that must wait till a later day, other than to point out that surveys have consistently shown that, in general, the American public wants the various programs - from Head Start to the Peace Corps to NASA - that tax dollars make possible.

But beyond discussing proportionality and surveys and infrastructures and so forth, moderates and progressives need to make the case on a broader, and a deeper, level.

The political context in which we find ourselves involves the well-documented effort by ultra-conservatives to starve the government of money and thereby force cuts in the various entitlement programs (Social Security, Medicare, Medicaid and education) that have been put into place beginning in the 1930s. (Such programs provide benefits to which all citizens are entitled, at such time as they might meet the qualifying requirements, such as age or income level.)

This anti-entitlement strategy, and the anti-revenue tactics designed to ram it through, reflect, on the part of some of the anti-tax conservatives, a principled libertarian philosophy. For many more, however, the issue is not "big government" per se, because they frequently support policies that give the government more power over its citizens (such as the Patriot Act or the anti-libertarian campaigns against flag-burning, medical marijuana, same-sex marriage, and so forth). Instead, the primary motivation seems to be to change the very nature of American governance, shifting it from a nurturing and communal approach to human needs, to a more controlling, moralistic response to human desire, difference, and fallibility. The fundamental question is how one conceives of the proper function and scope of government, and our society needs to tackle this question head-on.

All human societies exist on a spectrum between totalitarianism and Darwinist anarchy. In our view, enlightened government must have not only law-enforcement and national security functions but also a balancing, redistributive function. That is, it must arrange for an allocation of resources that is not wholly dependent on private actors and the vicissitudes of fate, but rather one that serves the needs of the greatest number of people (i.e., the commonweal). That does involve taking money from some people and giving it to others, and to that extent taxation is a violation of what might be called the "natural liberty" of individuals to keep whatever they have. However, as argued above, the well-to-do occupy the higher income brackets not simply because of hard work and ingenuity (although those are obviously important), but by virtue of the system which rewards their hard work and ingenuity, and which depends on the fruitful participation of the less fortunate.

Another important function of government is that it can help insure against some of the accidents of life, such as being born to parents who cannot afford private education, losing one's job in an economic downturn, or suffering illness. Paying taxes for entitlement programs is like paying insurance premiums: One pays for coverage so the resources will be there if and when one needs them.

At root, however, we believe that government has a moral responsibility to help people who are less able to help themselves. (Private charities are wonderful things, and they do a lot of good, but they're not really up to the task of meeting the needs of 280 million Americans.) We don't live in a free-for-all jungle, and we shouldn't have to live there. The real conflict, in these terms, is not between liberty and equality, or between liberty and government, but between liberty and humanitarianism. If we don't think that human society should simply let the weak or unfortunate suffer, perish, or fall further behind, then it seems a fair trade-off to restrict somewhat the liberty of the few in order to serve the needs of the many.

People concerned about what the current deep tax cuts mean for American society might think about framing the question this way. It's less about making the federal government bigger or smaller than it is about the character of our culture.

• Printer-friendly version