“Taxes,” Oliver Wendell Holmes Jr. once wrote, “are what we pay for a civilized society.”
Too bad the great jurist didn’t offer an opinion as to how much is too much.
That one he left for us to decide. And for much of the 20th Century the issue has dominated our politics the way slavery and abolition did the one before. More than abortion, religion or even race, the main political battle of our time has been about who gets and who pays.
The so-called Reagan Revolution of the ’80s was not about family values or making the Russians back down. It was about lowering the tax rate on the top income bracket to 28 percent from 50 percent.
Now the Clinton administration proposes reversing the trend by raising the top rate to 36 percent and slapping a 10 percent surtax on incomes of more than $250,000. In the distance are rumblings of a value-added tax, or VAT, of at least 5 percent. A kind of national sales tax, the VAT might be used to buy health insurance for the 37 million Americans who don’t have any.
And so the great battle of our time is renewed, which is as it should be.
Republicans are supposed to oppose higher taxes. They think people who lack things such as health insurance ought to go out and get jobs that offer such benefits. Besides, higher taxes are bad for business, and what’s bad for business is bad for everyone because that means fewer jobs. Besides, governments don’t create wealth, they just spend other people’s money.
Likewise, Democrats are supposed to favor higher taxes to pay for unmet social needs. This is the legacy of the New Deal-government propping up the poor until they can fend for themselves, government protecting workers from exploitation with laws that require a minimum wage and a safe workplace. Businesses might prosper without such interference, the theory goes, but society as a whole is better off with it.
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Those are the basic positions. Most of the fighting involves some permutation of these themes supported by the selective use of statistics or anecdotes. Slogans and epithets are routinely lobbed between trenches, and, as in all wars, truth is a frequent early casualty.
Republicans sneer at “tax-and-spend” liberals and their “welfare state” ideas that failed in Russia. Democrats rant about the failure of “trickle down,” about “socialism for the rich” and the “country club” morality that produced the savings-and-loan debacle.
Here I must confess a basic sympathy with the “tax-and-spend” camp. There are too many problems out there that the private sector hasn’t been able to solve. Problems such as poverty, illiteracy and homelessness. Insofar as government action can alleviate those problems, I support the taxes required to pay for it.
That doesn’t mean I’m for welfare cheats, public employee unions whose members take all their sick days, or incentive systems that encourage able-bodied people to stay in bed long after I’ve boarded the 8:15. Too many liberals aren’t fazed by these things, which is why they were out of power the last 12 years.
Anyhow, I was content last week to file my tax return by the deadline and let the big-time national columnists slug it out over taxes. Then my mailbox began swelling with tax-season propaganda, mainly right-wing cheap shots that cannot go unreturned. A sampling:
– The libertarian Cato Institute did one of its “studies” showing that big cities in economic trouble (e.g., Detroit, Cleveland, Philadelphia) also have high local tax rates. The economies of low-tax Sun Belt towns such as Mesa and San Jose are doing fine. The Cato conclusion: Older, failing cities need only lower taxes to revive their economies. (I am not making this up.)
– The head of the Heartland Institute, a local clone of the Cato, put out a release declaring that neither Mayor Richard Daley nor Gov. Jim Edgar really needs the money from the state income-tax surcharge. “Let the surcharge expire,” said he, because “higher taxes mean fewer jobs.” (Never mind that the state owes nearly $1 billion in past-due bills and is shorting local school districts by at least that amount; or that Chicago’s schools and public transit may shut later this year for lack of funds.)
– Rep. Dick Armey, a conservative Republican from Texas whose franking machine must be attached to his fan belt, had this to say: “Enacting Bill Clinton’s economic proposal . . . would result in a net loss of more than 1.8 million jobs and an increase in the unemployment rate of 1.5 percentage points. (How does he know it won’t be 1.7 million jobs? Or 1.4 percentage points? And does he really want George “No Plan” Bush back in the White House?)
So it goes, this war of words over taxes. Thrust and parry. Parry and thrust. It’s not easy being a tax-and-spender in the Business section of a conservative newspaper. Good thing the other side keeps sending ammunition.