Thursday, April 26, 2007

Starving the Beast

Back to the thing about the carbon tax. Daniel is correct to think that politically speaking, the strategy is a little dated. Reflexive opposition to taxes has been a staple of GOP popularity since Reagan. But in Reagan's case, even if he didn't kill the welfare state or even seriously wound it, it was clear that regarding gov't spending, he was part of the solution instead of part of the problem. President Bush fils obviously has no such credibility, and the Republicans in Congress are no better and in some cases worse. So now we are in the unfortunate situation where the disconnect between spending and taxes is putting pressure on taxes instead of spending. But even here, to the extent that the GOP base gets a word in, it's better to keep the Norquist tax pledges and work harder to cut spending.

But why, really, can't the GOP take a "responsible" attitude toward funding the nation's public needs? It's a special case a simple reality of politics, something I plan to post more about later: big ticket issues, like the fraction of the national economy that the government is going to take for its own purposes, are never settled by horse trading. Instead, there are always a series of deals and modifications that reflect an underlying modus vivendi.

As it applies to taxes, there is very likely to be a disconnect between the collection of the tax and purpose that the tax is collected for. The money is taken away from the private economy forever (and is likely to continue to be taken away indefinitely) , but the ostensible benefits of the taxes may never come. It's famous talking point among tax protestors that one of the lines on your phone bill is a special tax to fund the Spanish-American War (ie, the one fought in 1898) which persisted for a century through the force of inertia (I think it was one of the Bush tax cuts that finally got rid of that one, though I'm not completely sure about that).

People are not going to care a whole lot about a nickel and dime item like that, but they will care very much about a gas tax, or any variant of it. It is a plausible thing to ask the American people for a collective sacrifice for a common good like environmental improvement or energy independence. But we should ask, are these goods real, or just a rationalization for the federal government to expand its power at the expense of individual Americans?

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