The Relative Comment

soothing waves of relativity

What Voters Want

with 5 comments

There is a common refrain in today’s political climate in the US surrounding whether or not the new wave of elected GOP officials were elected with a mandate from voters that includes not raising taxes and not seeking any new revenues for government to handle budget deficits and debts. The GOP officials, according to this narrative, see the voters that elected them as only willing to approve of spending cuts. Did this directive come from the voters at large? I don’t think so. Why not? Because voters actually want to see taxes raised on the wealthiest Americans.

A poll in today’s Minneapolis Star Tribune bears this out in our state. “When asked to choose between a tax increase on the top 2 percent of Minnesotans or a state budget “balanced through cuts only,” 63 percent chose the tax increase and 32 percent chose the cuts.”

These are pretty similar to national numbers about the preference for tax increases to be a part of deficit reduction.  This is not to say that taxes should be increased or not, but to say that it is disingenuous to pretend that there is no desire for raising taxes. Don’t misunderstand, its not difficult to understand why the GOP are beholden to this narrative: if they bend from the provided narrative, the caustic and destructive part of the Republican party will see to that individual’s demise.

But it gets tiresome to hear the same lines over and over, as a government shutdown looms in Minnesota and national political world is calling names, that the GOP cannot raise any revenues, the voters sent them to cut government spending and not to raise taxes. Unfortunately for the Republican folks, it’s not true and it makes any attempt to come to the middle-ground and compromise absolutely impossible. And the hard-line marriage to this argument is going to cost you. At least in Minnesota.

(And for those who say that President Obama or the Dems won’t compromise, you are wrong. They have compromised a great deal to the GOP, nothing more so than the extension of the Bush Tax Cuts)

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Written by Christopher ZF

June 1, 2011 at 20:08

Posted in Uncategorized

5 Responses

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  1. The poll being what it is, I think you’re onto something, especially the narrow point you are making about what Republican politicians say, regardless of whether taxes should be raised or not. Then again, I don’t have a lot of faith in the genuineness of Republican politicians.
    Obvious tangents would explore whether the voters are right to want to tax the rich more, whether it would be effectual to accomplish the ends of balancing the budget, whether it could actually hurt the economy, etc etc. But the more immediate observation is pretty cynical– of course you can find people that think that others wealthier than them should pay for more public services. What’s amazing is that at least 30% of the bottom 98% think that others should not be made to pay for things they want (to put it roughly). A more interesting poll question would have been, “Should MY taxes increase to help budget the balance?” I think that poll might have come out a bit differently, and on that very point a few weeks ago I saw an unscientific startribune.com poll. The question asked whether the reader thought her share of the tax burden was fair. Most people said it was too high or just the right amount, if I remember correctly. But there was a significant minority that chose the option, “I’d be willing to pay a little more if I knew it would go to the right places.” It was at that point I lost a little faith in the voters (regardless of whether they are slandered or not by politicians)– the option to give a little more to the place one thinks is right is always available, and it’s called charity. To subscribe to the implicit assumption that the government a better or most proper allocator of private resources for the public good than the person who is voluntarily giving his wealth to a cause he believes in is lunacy, lazy, or worse. So maybe the Republican politicians need to try to change opinions rather than misrepresenting them.

    Brandon

    June 1, 2011 at 21:59

  2. The fear of politicians leads to a paralysis that will probably lead to the worst for the country. My feeling is that we are living in a new gilded age where greed is easy. Many wealthy people are actually willing to pay more taxes to invest in public education and invest in national infrastructure projects (but they are also human and they shrug their shoulders for the most part if the country allows them to feel secure in their vast wealth with low taxation). Investments such as in education and infrastructure are important for businesses, but they are also important because as it stands now, the income gap between wealthy and poor is growing and only investments in infrastructure and education will support the middle class. A large middle class made the U.S. the greatest country in the world, but our libertarian streak is killing the American Dream. The commenter is correct about people saying that they think they pay enough in taxes, pay their fair share. And the majority of Americans do pay enough in taxes. But I think we can all admit when a agenda of cut at all costs has gone too far. I think the point of Chris’ article is that most people are starting to realize that the top 2% of wealthy Americans, holding the vast majority of the country’s assets, can afford to pay a little more in taxes. I think there are different ways the country can do this and I think that the Republicans are still correct in their concerns about the efficiency of government in allocation of these tax revenues, but (and I recognize that this is the crux of the philosophical difference) it is lunacy, lazy, or worse to propose that wealthy individuals should get to decide through their charitable donations what “public good” projects are worthy. I think that we tried this extreme form of liberalism in the 1890s and it led to the Great Depression. I’m an advocate of balance. Government and the private sector balance and moderate the worst instincts of each. But right now the politicians are afraid of the back lash of ideologues and idiots. They should do the right thing, raise taxes AND make important cuts to bloated defense spending, oil subsidies, etc. and their inability to explain the need for balance is deadly.

    John Z.

    June 1, 2011 at 22:42

  3. Lunacy, lazy, or worse.

    Lovely. I don’t actually disagree with your skepticism about government, but show me any reason to have more trust in the private sector’s definition of ‘public good’. That includes charities.

    More to come.

    czfinke

    June 2, 2011 at 10:14

  4. Brandon, the difference between giving to charity and allowing the government to redistribute income to charitable causes is not is not lunacy, laziness, or worse. Rather, it is fundamentally a difference in economies of scale. The government’s legal right to tax citizens gives it a donor base significantly larger than any private charitable organization will ever have. Thus, in addressing social issues, it can succeed inefficiently where even the most efficiently run private charity will fail.

    I can want to provide basic medical care to the elderly or breakfasts to poor school children or potable water to every person living in the country. I could also (probably) find private charities that attempt to provide these services (maybe not for the water example). Even assuming these charities are the most efficiently run organizations in existence, their inability to adequately address the problem on anything more than a local level should be obvious. Maybe the organization can provide medical care for the elderly who show up uninsured at the local hospital or maybe it can provide breakfast at all schools in a given district or maybe it can provide water to a single housing block. Yet such local success fails far short of my initially stated goal – which is global (global meaning national in this argument). Even the best run private charities fail in addressing social issues on a global scale due to size restrictions.

    The government, with its vast resource base can address these issues both locally and globally. Sure their are inefficiencies that go along with this but a large inefficient operator is better than a small efficient operator given a large enough scale. The fallacy in your argument is assuming comparability between large and small scale operators. You assume that an efficient local operator (private charity) would remain efficient if you scaled up its service to a global level. Other than its inability to ever command a large enough resource base to be a global operator, there is no compelling logical reason why one would assume a lack of efficiency loss in the scaling up process.

    Basically, I take umbrage at your claim that anyone who thinks the government can provide services (like education, water, social welfare, defense, medical insurance, etc) better than a private charity can is a lunatic or lazy. While on a local level you may be correct, many of us are not interested in providing just for our local community. Many of us think at a national level and would like to provide these services nationally. I challenge you to justify your statement on more than just a local level.

    jdm

    June 2, 2011 at 11:38

  5. Haha… well, I apologize for inartfully making my point. I probably should have avoided the hint of alliteration in turning phrases– it gave you guys an easy target to latch onto.
    The truth is, I agree with much of what you’re saying here. There are a lot of things that the government is uniquely positioned to do better in than private entities (although we may disagree on the number of such activities). For the sake of argument, I think government should levy taxes and provide for schools, transportation infrastructure, police, and the like, because it makes most sense, perhaps even more so given economies of scale.
    Here’s where I dropped the ball by not being precise. The poll option I mentioned implied that some taxpayers would be comfortable paying a little bit more than what they currently pay. That extra bit (let’s call it “X” amount) has a relatively less value than the first X amount paid into the system. That’s because I’m assuming that the first X amount went for more essential government services than the last X amount would. Now, you could disagree with my assumption, but I do think it’s relatively fair. After all, it’s most reasonable to use that first X to provide for police than for $11,000 artist-designed water fountains on Nicollet Mall, and that’s in fact what most politicians do. Since we have a relatively nice and orderly place in Minnesota, I’m guessing that we do a fair job of allocating tax revenues to most of the things we would all agree are most important. But, you can see that the utility of each allocated tax dollar diminishes when we start to pay for things like say, official prayer breakfasts.
    At the point at which essential services are paid for (which I am assuming is the case in Minnesota), I think that a dollar in the hands of a private charity is better allocated (or at least as well allocated) than in the hands of a public entity relative to particular problems. I don’t know if I could think otherwise– the private charity typically knows more about the problem than the government (though not always), probably has a more customized way to address the problem, and likely better relationships with experts that can solve the problem. From a fiscal standpoint, too, the government gets away with things that would land executives of private charities and companies in jail all the time, as so the latter has a better incentive to act responsibly. Now, I know some private executives get away with some of that stuff too, but economies of scale is a double-edge sword on this point (i.e., the government’s mistakes become magnified to a whole new scale). And I’m not sure I fully understand your economies of scale point, either, Jeff. I’m not convinced that there really are that many “global” problems. Mostly, there are local problems repeated on global levels. If you want to address an issue nationally, you may be able to do it consistently with a federal solution, overseen by a central government. Of course, one charity would not be able to undertake an effort on the scale of a national government. But there’s nothing to say that many local charities performing essentially the same function could not address a problem that exists on a national scale. (And the aggregate donor base would be effectively the same size as government’s.) In other words, “national” is more a category of scale rather than something that presents distinct characteristics. Obviously, we could come up with exceptions, but municipal governments prove every day that problems, which could be described in national terms because they are repeated nationally, can be solved relatively effectively through purely local efforts. There is nothing that city governments deal with that could not also be characterized as national problems—are you implying that everything should eventually handled by the federal government? And if not, what is your criteria for problems that qualify as sufficiently national? I think that when you say that you want to address a problem nationally, what you are really saying is that you want a problem solved consistently on a national level. There is some elegance to that, and I’ll grant you that decentralized charities working within local spheres would not solve a problem as consistently as a federal government could (if it really could), but I think they would solve it better on the balance.
    Now, I see all sorts of problems with my line of reasoning. For one, you could say that balancing the budget does implicate a lot of essential services (to which I’d respond with, why are we subsidizing things like the arts then?), so we are talking about additional tax dollars with significant utility. Second, the poll question implicitly posits whether people would be willing to pay extra if they knew that extra X amount would have similar utility as the first X amount in the public coffers (i.e., “if it would go to the right places”).
    So, I was hasty by calling something lunacy, but I really do think that given what we already pay in taxes, and what is already provided for in return, an extra dollar with a private charity has more public utility than it does with government. And thus, someone who would be satisfied in paying more taxes should already be just giving that money to charity anyway. I realize that my position is built on assumptions, but I do think they are fair. But “donor base” bespeaks all sorts of other assumptions about government and labor that would take a long time to go into, and I am thinking about starting a blog…

    Brandon

    June 2, 2011 at 21:19


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