A simpleminded unification of tax opinion

(Keep in mind that this is mostly just a thought experiment.  I’m going to make sweeping generalizations which I know don’t hold anywhere near perfectly.  The idea is to learn from this thought experiment, not to pretend it’s the Truth.)

It occurs to me* that Tea Partiers and Tea Party opponents feel the same way about taxation if you go up a level of abstraction.  This fact holds across a broad swath of the population, whether they’re pro-tax or anti-tax.  (I was going to call the pro-tax people “socialists” — which, in a Hayekian sense, they are — but I couldn’t find a good unifying name for the anti-tax folks.  “Liberal” fits, but it’s been corrupted, and I’ve learned not to smash my head against that particular brick wall.)  It’s all about a particularly aggressive idea of “fairness” — one which punishes cheaters and recompenses the cheated.  The only difference between pro-taxers and anti-taxers is who they think is cheating.

Anti-taxers see their income — their wealth, however great or humble it may be — as the sweat of their brow, for which they worked hard and which they’ve thus earned.  They see taxation as armed robbery on an industrial scale: the government putting a gun to their heads and taking the fruits of their long and honest labours to shower it upon SEC agents who surf porn at work or mostly-stereotyped Lazy Poor People On Welfare.  Those people are cheating — getting money stolen from the productive classes — and taxes are the instrument of their dishonesty.

Pro-taxers see things the other way around.  They see prosperity as either inherited (you were born into a rich family, got a privileged education that opened elite and well-guarded doors, and were given a cushy job doing whatever it is rich people do) or corrupting (you sold out your background and aspirations to dance to the fickle tune of the fat-cat capitalist pipers, and your padded salary and snappy pin-striped suit are crumbs thrown to you from the tables of Power).  The money to support that prosperity must come from somewhere, and it’s obvious from the single moms who work eighteen hours a day to support their children that they’re taking it from those less fortunate than they.  It’s in fact the rich people who’re cheating — gaming the system to line their pockets at the expense of those who can’t play the game — and taxes are instruments to redress the wrongs they create.

This is how you get Tea Party participants who support Social Security: I can quite easily reason (if I’m a Boomer about to retire — which I’m not) that I paid into Social Security and deserve to get back out what I put in.  That much is fairquid pro quo, I paid for it so I should get it.  On the other hand, for thuh gummint to take money out of my hypothetical kids’ college fund to support crackheads who refuse to use condoms is massively unfair, because that’s not what I wanted the money to go to.  In a sense, my hypothetical Social Security contributions still are my money, in the sense that I’ve paid for something and I expect to get it.  (This, alas, isn’t how Social Security works.)

I’ll keep stereotyping for a paragraph or two, because it amuses me to do so.  Anti-taxers see pro-taxers as at the very least enablers for the cheaters, and more likely cheaters themselves.  You go to a community college and get a two-year certificate in appreciating the culture of underwater basket weaving — smoking pot and fucking around, more like — and now you’re working at a government-funded “non-profit” and telling me what I should do with what I have left from ten months of eighty-hour work weeks making stuff people want to buy once the IRS is finished with me?

Or on the other side of that coin, consider the pro-taxer’s point of view: I earn a BA in Social Justice with a minor in Communications, taking the same course load and paying the same tuition as you with one-tenth the prospects of clawing any of it back.  I take a 90% pay cut to work at a non-profit that demonstrably helps people, every day while you go off to work for a faceless engineering company getting huge tax breaks from the suburb next door.  And after all of this, you have the nuts to complain about a three-percent income tax hike? After selling your soul and gaming the system for your own personal gain to the tune of ten times what I’m making for equivalent effort?

Okay, let’s take a deep breath and step back into objective reality for a moment.  The underlying problem here is one of trust — neither side trusts the other to play a level game and not exploit them.  And, of course, elements from (or supported by) both sides really do exploit the system.  This is getting towards what I meant when I wrote that we need an entirely different mindset before we get to anarchotopia.  A lot of our confidence in government comes from its position as an arbiter of confidence, a defence against people trying to cheat us.  If someone mugs us (cheater!), the cops will (we suppose) catch the mugger and get our iPod back.  If the bank jacks up our mortgage interest (cheater!), we can file a lawsuit and the courts will (we suppose) make the mean finance majors give our money back.  But of course governments are full of people most remarkably like us: they’re trying to find the easiest way to get through the work day, and are just as vulnerable to incentive and temptation as anyone who earns an honest living.

For commerce to exist in anarchotopia — or for those of us a bit closer to the present day to be able to run a society when the all-inclusive safety net goes all Weimar Republic — we’re going to need to trust the other guy to work for what he can and only ask for what he really needs.  (Again, the Heinleinian loonie ethos is instructive: I’ll give you a bottle of air now, with the expectation that you’ll pay me for it later.)  Proper cooperation, let alone proper charity, depends on confidence that the other guy isn’t trying to fuck me over.

Unfortunately, politics are going exactly the other way.  Take health-care reform as an example: it boils down to “The ebil awful insurance companies and those rich Porsche-driving doctors are trying to cheat you into paying too much for health care!” vs. “The socialist Democrats and their labour-union co-conspirators are trying to cheat you into paying for health care for people who’ll vote for them!”  Never mind any meaningful issues about, say, the projected costs of Medicare into the next forty years (wishful thinking; if they go the way we fear we won’t make it past fifteen).

The kind of trust we need is based on responsibility, and that’s a fucking hard sell to people who’ve been rewarded for thinking of themselves as victims of other people’s deceit.


* Where do I fall on this scale?  If you’ve been paying attention, you’ll understand that I think taxation is immoral — which we can basically count as “cheating” — but that higher taxes are nonetheless inevitable if we want to avoid the sort of bracing excitement that presently surrounds Greece.  I would like for that increased taxation to be Pigovian and accompanied by triggered income tax reductions when the deficit/GDP ratio — there’s a better measure indexed by population growth which I read once on an econoblog and can’t find again — drops below a certain threshold, but for the most part I’ll take what I can get if it staves off hyperinflation.  I also think that raising taxes by itself is woefully insufficient to the task of fending off the coming financiapocalypse: we’re going to need to slash and burn — er, strictly means-test — damn near every social-welfare programme on the books, particularly those targeted at retiring Boomers who have in good faith paid into those very same programmes.  It’s gonna suck.


6 Responses to “A simpleminded unification of tax opinion”

  1. April 27, 2010 at 21:50

    Nice, well balanced, thoughtful post.
    It does nothing to redress the grievances of those of us who pumped money into the SSS since 1969, but I totally agree with your POV. The problem is that everybody thought they’d get “Free Stuff” from Uncle Sugar, and nobody was minding the henhouse during the run-up to this.
    I agree, we’re gonna have one hell of a hangover now that this party bubble is about to pop!

    • 2 kbiel
      April 28, 2010 at 16:17

      What grievance do you have? The money you put into SS was never intended to come back to you. There is no account with your name on it at the SSA. Each quarter your contribution (and that of your W2 employer if you are not self-employed or clergy) is divvied between the current recipients with any left over going to the general fund. (Oh, OK, congress does pretend to invest it in ridiculously low-yield treasuries promising to pay back the treasuries tomorrow for increased spending today, but not one of those treasuries has your name on it.) It is welfare, plain and simple. You might as well demand that all of your medicare payments come back to you or any other federal taxes. Of course, if we all did that, then where would the money come from for Alaskan bridges and Robert Byrd memorial highways/freeways/institutes/bridges/dams/et cetera? After all, Alaska and West Virginia (among other states) receive more in federal funds than they pay in.

  2. 3 aczarnowski
    April 28, 2010 at 07:29

    Unfortunately I knew all the numbers on my W2 weren’t coming back to me since the first days I started getting W2s. Well OK. Maybe I knew after getting W2s with commas in on them after college. But since then I haven’t paid into social security (or FICA or Medicare or pick any other .gov lunch money stealing) with the expectation of “getting back.” Though I am glad to see a few family members getting back, to which I say more power to ’em.

    I have had to take a deep breath on many occasion and review my conclusion that busting caps over it isn’t going to work right now. Maybe later, but not right now.

  3. 4 Madrocketscientist
    April 28, 2010 at 08:15

    I first started paying into SS 20 years ago, and even then, I knew that the only way I’d ever see a dime of it back was if I became permanently disabled long before I retired.

  4. July 22, 2011 at 01:37

    Hi there,
    I just found your blog and was looking at the archives. I’d thought I say that this article was probably the best description of the pro-tax/anti-tax mindset I’ve ever seen.

    Cheers, and I’ll probably end up commenting on some more current posts.

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