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April 15, 2005

How Do You Like It?

"Republicans believe every day is the Fourth of July, but the democrats believe every day is April 15th."
-Ronald Reagan

I may be a dilettante in the dismals science, but I do happen to remember one thing from my High School economics class. My textbook (or workbook, rather) explained that there are three major reasons why someone will engage in financial transactions: command, market, and tradition. To illustrate briefly, a "command" transaction involves some sort of coercion, as in a ransom note that reads, "We have Bunny. Gather one million dollars in unmarked non-consecutive twenties. Await instructions. No funny stuff." Market transactions are much nicer; I give the barista an unmarked twenty, she gives me a thimbleful of bitter brown liquid and hipster status. And sometimes, you part with money because of tradition. Why else would you feel compelled to chip in on a card/gift/cake for your co-worker if it weren't his birthday?

I didn't say that what I learned in High School was very profound.

But I do think that these three explanations for financial transfers provide a good framework for how Americans view taxes.

Broadly speaking, the Right, Left, and Middle all adopt to some degree a mindset corresponding to Command, Market, and Tradition when they sign their tax forms.

Most obviously, Republicans hate taxes, and feel they only pay them at the end of a gun. This perspective is best explained by P.J. O'Rourke, America's greatest living writer, in Parliament of Whores (p. 100):

. . . Remember that all tax revenue is the result of holding a gun to somebody's head. Not paying taxes is against the law. If you don't pay your taxes, you'll be fined. If you don't pay your fine, you'll be jailed. If you try to escape from jail, you'll be shot.
To those of us on the Right, paying taxes is terribly unfair, akin to someone coming into our homes and taking roughly a third of everything we have (as Marylin vos Savant likens it). We worked hard for that, and we have less of an incentive to work hard in the future if we don't get to keep what we own. To add insult to injury, we not only resent the people who steal from us, we don't particularly like them personally, either. We're very aware of the government's monopoly on force, which makes us keen to remember the Boston Tea Party and the American Revolution in general (hence, every day is the Fourth of July, especially April 15th). And since we look at our pay stubs more frequently than the Federal budget, this may go a long way toward explaining why we are more eager to cut taxes than cut spending.

The Left have a more subtle view. Not being a member of it myself, I must imagine what goes through the mind of a liberal as he signs the tax forms, "A little of this may go to waste, but think of all the great things I'm getting in return: national defense, a cleaner environment, education, research, taking care of the poor (though I wish we could do more of that), spurring economic growth . . . all kinds of things I couldn't do myself." Rather than a black hole, the government is a gigantic service industry we control. We get things in return for our money, sometimes things we don't like, but overwhelmingly things we need and want and couldn't get elsewhere. It baffles liberals how often conservatives forget that. Taxes are less of a bother than spending. In this civic market, we're generally more worried about the quality of our purchase than what we're paying. After all, we usually get more than what we pay for.

The average Joe, however, probably couldn't be bothered to get very excited in either direction. He pays his taxes every April 15th because that's what everyone does and has done since he can remember. Occasionally, a politician will remind him that he could keep more of his paycheck--or that there is some new government goody he could ask for. But mostly, the Middle are complacent. I do, however, think the Right has an edge, since the compliance cost of preparing taxes is so high (in money, time, and mental anguish) that the Middle aren't likely to feel as if they are getting anything in return for their exhaustion. But ultimately, this provides the will for simpler taxes, not necessarily lower taxes.

I'd say that these three perspectives hamper communication between these groups, resulting in either astonishment or frustration. While both the Right and the Left try to lure the Middle, the Left might gently remind the Right of the free-rider problem when discussing taxes. In turn, the Right, as O'Rourke suggests, could ask the Left if they are willing to shoot someone for a particular program . . . I guess that wouldn't really ease communication, but it'd be amusing nonetheless.

Posted by Zach Wendling at April 15, 2005 12:50 PM

Comments

Of course, in that book (or was it Eat the Rich?), O'Rourke did defend certain transfer programs...

Posted by: Paul at April 15, 2005 01:25 PM | permalink

Of course, a lot of that "hard-earned" money comes from exploitation of the poor through the payment of shitty wages. Morally, to pay such wages is every bit as much "theft" as taxes are.

I'm not sure what you mean by "not liking them personally." You dislike people personally just because you disagree with them?

Posted by: Joel Thomas at April 15, 2005 02:06 PM | permalink

Interesting discussion, Zach. But, it seem your bifurcation of the Right-Left spectrum on taxes places the Right in the wings of anarchy, doesn't it? If the Right is truly and intrinsically anti-tax, isn't the Right for anarchy? I know that's an absurd conclusion, so maybe I'm asking for a bit more subtlety on the Right's position?

Ultimately, we'd probably all be best if we regarded taxes as, yes, coercive, in the form of undesirable but undeniable protection money:

"It's a nice little country you have there--be a shame if anything happened to it"

while eternally fighting to keep the cost for protection down.

Posted by: Nash at April 15, 2005 02:42 PM | permalink

That's funny, I didn't think I coerced anyone to work here. If they think they're worth more, the door swings open and they can find employment elsewhere.

And it's funny that many of the people who complain they're underpaid are the worst/laziest employees. Wouldn't their mere acceptance of a paycheck equal theft as well?

But maybe I should close our doors and explain to the 75 people I lay off that I couldn't bear to "steal."

Joel, you're goddamn brilliant!

Posted by: Wage Payer at April 15, 2005 03:17 PM | permalink

The galling thing about how income taxes are collected have to do with the cavalier attitude of the IRS, the complexity, the fact that ~20% of the population pay over 50% of the taxes, the wastefulness of the federal government, etc.

I think taxes are a necessary evil. The problem I have is complexity and the "progressive" tax structure. Tax me the same as everyone else. If I work harder (either by becoming more educated, willing to work 12 hours/day), I should be able to keep my money. Why should someone, who made all of the wrong choice in life, get to keep theirs? If I pay 15% and make $100,000 and someone else pays 15% but makes $50,000, I pay twice as much. That's fine. The problem is that the $50K person acutally pays a lower percentage. Those on the lower income brackets also use more government than those in the higher income bracket. Also, the super rich actually pay less in taxes (percentage-wise) than I do.

There, I feel better.

Posted by: van at April 15, 2005 03:27 PM | permalink

Wage Payer,

It's not your money, it's God's money. Whether or not you pay a certain wage is legally one thing, but God will judge harshly those who have misused his assets through exploitation.

Posted by: Joel Thomas at April 15, 2005 08:21 PM | permalink

If you're going to argue "that all tax revenue is the result of holding a gun to somebody's head" I think you have to accept that all of the private property you enjoy is the result of holding a gun to someone's elses head.

It's rather amusing how some people who are strongly in favor of private property rights don't recognize that absolutely everything constituting "property" is essentially a service you expect from the government. That service is the constant, government-backed guarantee of your expectation of future use of goods considered "yours" without fear of interference.

What makes anything "yours"? The fact that the government says it's yours. If there was no authority out there to enforce "property" then everything you consider "yours" could just as easily be "mine" with one well-placed rock to your head.

This is most obvious in today's world, where "intellectual property" is such a huge deal. It gives a government-sponsored monopoly to anyone who holds a "copyright" or "trademark" or "patent", which basically holds a gun to anyone trying to use an *idea* for their own gain and say "uh-uh ... not your property."

Now, this doesn't mean that an argument that TO MUCH taxation is unfair is any less valid. But attacking taxation generally as "holding a gun to someone's head" is silly, since you can say the same thing about property rights.

Posted by: Aaron at April 15, 2005 09:39 PM | permalink

Well, since about half of our income goes to the government I guess that would give us reason to complain if it weren't for all of the services provided.

And even for the lazy bums out there...at least they get to eat. Our taxes pay for their food (ever heard of welfare). From what I hear it is worse in other countries so maybe our high taxes are a "blessing in disguise." Hmm..

Posted by: Hidden Nook at April 16, 2005 12:19 AM | permalink

Well, since about half of our income goes to the government I guess that would give us reason to complain if it weren't for all of the services provided.

And even for the lazy bums out there...at least they get to eat. Our taxes pay for their food (ever heard of welfare). From what I hear it is worse in other countries so maybe our high taxes are a "blessing in disguise." Hmm..

Posted by: Hidden Nook at April 16, 2005 12:19 AM | permalink

I think you have to accept that all of the private property you enjoy is the result of holding a gun to someone's elses head.

Huh? Everything I own is from me working my butt off, earning a goog education and working in a profession, which allows me a certain income. I did not exploit ("hold a gun to someone's head) anyone in this process. In doing so, I joined the 20% of the population that funds 50% of the government. So yeah, I expect the government that I am paying for to protect my personal property rights. Any government that does not, ceases to be "of the people, by the people, and for the people." The concept that everything I earn is the government's first and what is leftover I can keep is morally abhorant to me. If this is the future of the US, then there will be another Civil War.

Posted by: van at April 16, 2005 07:11 AM | permalink

Those on the lower income brackets also use more government than those in the higher income bracket.

I think the facts are quite the opposite, actually.

'Tis true that governments cannot be supported without great charge, and it is fit everyone who enjoys a share of protection should pay out of his estate his proportion of the maintenance of it. John Locke

The subjects of every state ought to contribute toward the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state. Adam Smith

greg

Posted by: Gregory Travis at April 16, 2005 11:46 AM | permalink

Remember that all tax revenue is the result of holding a gun to somebody's head. Not paying taxes is against the law. If you don't pay your taxes, you'll be fined.

This isn't terribly profound. Not paying your bill in a restaurant is also against the law and if you don't pay your bill, you'll be "fined" (or worse) by men who are "holding a gun" to your head.

Just as the fact that when I enter a restaurant, order a meal, and eat it produces an unwritten obligation on me to pay my subsequent bill, residing in ("entering") the United States and partaking of everything provided on the government "menu" obliges me to pay my tax bill.

It's an unwritten contract, similar to the countless unwritten contracts that each and every one of us enters into every day -- contracts that require, by law, an obligation from us and that are enforced ultimately at the barrel of a gun.

Given that we're free to enter and leave the United States, just as we're free to enter and leave any restaurant, I cannot see how "taxes" are special in this regard. Perhaps one of our conservative members can explain why he or she isn't obligated to pay the bill that Oliver Wendell Holmes called the cost of civilization?

greg

Posted by: Gregory Travis at April 16, 2005 09:50 PM | permalink

Wage Payer,
Yeah, the guy who works for you, has child support or a family, has few other options should just shut up and take his measley paycheck. I don't know what bussiness you run but I do know most people who work shitty low paying jobs don't have other options. I even know quite a few folks who have too much education to get a low level job in their field and have to pay back student loans working for little or nothing. When you say the door goes both ways your mistaken, the idea that a person can just up and get a different job isn't realistic.

I'm geussing your one of the assholes all about eliminating those pesky OSHA regulations too.

Posted by: Treban at April 18, 2005 09:26 PM | permalink

 
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