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Read My Lips: More New Taxes!

A bigger April 15 bill would mean a better society

Time Life Pictures/Mansell/Time Life Pictures/Getty Images

Happy Tax Day. Yes, I say that every year. Yes, I still mean it. Yes, I know that not many people feel the same way.

Nobody likes writing checks to the government. At best, it’s something people tolerate. At worst? It’s a source of resentment and anger. Either way, it’s a political fact of life—one that imposes narrow boundaries on what policymakers in this country can do.

It doesn't have to be that way.

Sure, there are plenty of principled, intellectually honest reasons to think taxes should be lower. But one reason for the rage against them—and the perception that they are larcenously high—is that the act of paying them is so divorced from the act of receiving the benefits that they finance. You might not like paying a lot for groceries, clothing, a car, or a house. But it feels a lot better because, once you’re done with the transaction, you know what you’re getting for it. You’ve taken care of a basic need—there’s food on your plate, a roof over your head, and, if you’re lucky and can afford it, a Camaro in your driveway.

Taxes do the same thing. That payroll tax taken out of everybody’s check? It’s buying you Medicare and Social Security, which means a more secure retirement free of crippling medical bills. Your federal income tax? Its effects are a lot more diffuse. But chances are pretty good that you’ve already used some infrastructure today—whether it was a road or railway you took to work, or maybe the information technology connections you’re using to read this article. Federal, state, and local taxes helped pay for that. Is your water and air clean? Are you safe from threats, domestic and foreign? Then you’re getting something valuable from the Environment Protection Agency, the Federal Bureau of Investigation, and the Department of Defense. Your tax dollars paid for those, too.

Sometimes, of course, your tax dollars pay for supports and services you won’t use. And you might resent that. But even taxes that pay for someone else’s benefits can benefit you. Why does the U.S. not have the massive underclass that characterizes many third-world countries—or the incipient danger of violent upheaval that accompanies it? The safety net your taxes purchased, tattered as it is, buys a degree of social harmony, too.

And simply reducing what government spends on these programs, in order to allow for lower taxes, would mean cutting a lot of people off from supports on which they literally survive. That’s what the Paul Ryan budget would do—end government-provided health insurance, housing vouchers, and food assistance for millions. Maybe you don't care and maybe think that has nothing to do with you. If the latter is true, you should consider the possibility that, someday, you could be one of “those” people. You could lose your job or suffer a debilitating injury or encounter some other, random act of chance that would throw your life into instant turmoil and make you, too, dependent on the welfare state to get by.

Maybe you have no objection to paying for the welfare state in principle. Maybe you just don’t like the way government does it—by squandering money on poorly designed programs, or giving help to people who don’t need it. That’s fair. Lots of government programs are inefficient. Some are even prone to corruption. But, just so you know, there’s probably less waste than you think. The food stamp program, for example, is a model of efficiency—with low overhead and fraud rates.

Anyhow, the source of the really big spending is government health care programs—and that’s because medical care itself is expensive, no matter who's paying for it. There are plenty of reasons to think government is no worse at doling out those dollars than the private sector—and possibly quite a bit better. (Government has lower overhead, more economies of scale, and so on.) 

Maybe you don’t like tax day for a whole different reason. Maybe it reminds of how high taxes are—and you think that, because of those high taxes, the economy grows more slowly. That would mean fewer jobs and less pay for you—and the country as a whole. It's not a crazy argument. You’ll find plenty of smart people who agree with that, particularly if you listen to officials in the Republican Party and their allies in the conservative movement. 

Tax levels US v the World - from CBPP

But the evidence for this point of view turns out to be thinner than you've probably heard. Relative to other countries, tax rates in the U.S. are relatively low, even when you throw in local and state taxes and add them to federal levies. Overall, according to the Tax Policy Center and Center on Budget and Policy Priorities, which supplied the graph above, taxes in the U.S. are among the lowest in the developed world. The average for countries in the Organization for Economic Cooperation and Development, an organization of rich countries, is higher. And in countries like Sweden, Norway, and the Netherlands countries, the average is much higher. In those nations, taxes account for more than half of total national income.

That level may sound scary but, as many of us have written before, you could make a good case that the people of Scandinavia and Northern Europe know what they are doing. They are far more secure, thanks not only to national health insurance but also to generous provision of child care and unemployment benefits. And despite the high tax burden, their economies have historically been strong—in part, because the combination of investment and a secure safety net makes people more comfortable with a dynamic, ever-changing economy. The wonks used to call this economic model “flexicurity.”

As conservatives like New York Times columnist Ross Douthat note, you can't simply import that model to the U.S. wholesale. But the Scandinavian experience is one reason that many economists and policy experts think there's room for U.S. taxes to rise. Among those who have endorsed the idea, in one form or another, are Bruce BarlettRudolph Penner, and Jeffrey Sachs. David Leonhardt, the Pulitzer-winning New York Times correspondent and editor, used to keep a running tally of such people. You can see an old version of his list here. It's far from exhaustive.

Naturally, there are arguments to be had over how high taxes should go, exactly who should pay more, and what form those levies should take. Personally, I’d opt for some combination of taxes on wealth and taxes on carbon, figuring it'd be good to fight inequality and stop global warming. And while taxes should go up for most people, they should be a little lower for some of the working poor.

But having that discussion feels a little silly, given that higher taxes are nowhere near the political agenda right now. That's why the first step towards a more sensible conversation about economic policy and our priorities in general is to admit that taxes can be a good thing, as long as they pay for worthwhile things. I still think they do.