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September 12, 2003

Tacitus on Taxes

Interesting thoughts from Tacitus on the way conservatives should analyze tax policy. He discusses the jubilation in some conservative circles over the failure of Alabama Gov. Riley's tax plan.

He quotes, first, from a Washington Post article describing conditions in Alabama:

"Alabama has the nation's lowest state and local taxes per capita and ranks near the bottom in tests of public school performance. It also has more than 28,000 inmates in a prison system built for 12,000, and its state police force has only six troopers patrolling 67,500 miles of roadway after midnight. Riley's plan also aimed to shift the tax burden to the wealthiest Alabamians, who pay an effective tax rate of 3 percent, from the poorest, who pay 12 percent."
Then gives you what he thinks is a reasonable conservative take on it:
Now, if the parks system or the state arts council was underfunded, I'd say let 'em starve. But prisons and cops -- and yes, even public education -- are legitimate functions of government at that level, and so I have to ask whether underfunding them is really the conservative thing to do. Also, while I'm more or less a flat-taxer, I think it's pretty clear that a progressive tax code is more just than a regressive one; and that's something Riley's plan would have fixed.

All in all, the whole episode and the anti-tax rejoicing in the aftermath points to an increasing cognitive dissonance in Republican circles. The notion of taxation as an evil in itself is useful as a tactical tool, but it's not useful as an analytic tool: you don't get good governance if you focus on cutting taxes in the absence of any consideration of legitimate budgetary needs or any effort to concurrently reduce spending. But that's exactly what's happening, in the Congress and in Alabama. It's worrisome and I daresay wrongheaded; and my saying so will forever bar me from winning a GOP primary in Loudon County, Virginia.

Tacitus is one of those really interesting kinds of Republicans who oscillate between conservative and moderate takes on various issues. He takes strong positions, but looks closely at the facts and takes the time to consider and evaluate them. He's not an ideology machine, but an actual concerned citizen with an open mind. Bravo.

Posted by William Swann at September 12, 2003 10:22 AM
Comments

Wonderful piece William. As a former Republican who switched over just last month to Democrat in order to vote in the upcoming Primary, I must whole heartedly agree with this very well thought out take.

The right has long survived by being the party of lower taxes. In 1980, when Reagan was first elected, lowing the tax rates were truly necessary. I don't have the figures, but supposidly the wealthiest Americans paid more than 50% in Federal Taxes. At that level, business really does suffer. Taxes were lowered, and then lowered again, and then again and again again. They keep getting lower, all the while our population grows and the necessary outputs by the system of governance only expands. It is my opinion that the failure of the latest round of Bush tax cuts points to a deep problem with the right at present, one which not easily go away in today's overfunded system of elections.

Not to overgeneralize, but the right is still running on the notion of Ted Kennedy style funding being the enemy, when now the real overspending is in the tax reductions. They do this because it make tremendous political sense because it holds alot of political capital. The sad thing is that with a lower tax rate, the government fails to pay its bills, then leaving the states to pick up the extra expense. Bush's cuts have done two things: Grow the Deficit accounting for 40% of that 525Billion and produce concern in the business community of the path we're on. Though I did not previously agree with Paul Krugmen's assessment that the right is trying to starve Social Security and Medicare until they can be repealed 10 years from now, it is sadly increasingly looking as such. Additionally, we are in a terrible economic slump and the tax cuts have not produced a single new job as far as I can tell. With jobs dropping every month since January, and notions of 'structural' unemployement now arising with the "working" retired entering the force after the failure of the stock market in 2000, we are in for a long road of economic disappointment.

Are tax increases the answer? I don't know. As a former republican it is counter-intuitive for me to say so. But interestingly, do we have a choice? It is very apparent from where I stand that these tax cuts have failed to do what they were intended to do. The markets are up while unemployement is rising. I think that we may have cut too deep, and we may need to return to the codes of 1999. Unfortunately, it doesn't make much political sense to do this as the right can spend $170M in commercials blasting the candidate for 'raising taxes.' It won't make sense though until we have a candidate with the balls to run an opposing commercial blasting the right with 'starving the government and bankrupting the economy.'

It'll be hardball next year, and if the economy doesn't improve, I really hope the average moderate comes to their senses and realized that governments must have some tax base or else we'll be in chaos.

BTW, tacitus' link isn't working. I'd love to read his whole piece.

For a good article on what one Presidential candidate has to say about undertaxing and foreign policy check out the op-ed piece by Dean today, click my name. If you could direct me to any at length statements on taxes by Clark or other candidates, I'd love to read them.

Steven

Posted by: Steven R at September 12, 2003 01:11 PM

Ooops. Sorry about the link. It should work now. And his comments are in the top post in his blog now, so you can get there with just the main address: www.tacitus.org

Posted by: William Swann at September 12, 2003 01:26 PM

Just read the Dean piece, and he makes some very interesting points. I especially like the emphasis on all the *other* security threats facing us around the world, which could be addressed with well-crafted and properly funded programs -- chemical facilities, unsecured Russian nuclear materials, etc.

Those facts are not widely understood. And it's probably the case that we could eliminate more real threats with the $87 billion requested for Iraq, spent elsewhere, than we are with our current policy in Iraq.

One part that I wonder about is a point that's widely made by a lot of folks these days:

"Far from being destroyed, terrorist network al-Qaida has dispersed and been reconstituted - with Osama bin Laden reported to have convened a terrorist summit in the Afghan mountains just last April. The Taliban is again on the move, threatening the safety and security of whole swaths of Afghanistan."

I think the situation vis-a-vis al Qaida is a little more complicated. We've obviously succeeded in preventing any terror attacks on U.S. soil since 9/11. I have the sense the administration has been quite aggressive in pursuing al Qaida directly, where possible, and they've certainly been aggressive here in the U.S. in pursuing possible terrorists with the FBI and Justice departments (hence all the controversy surrounding Justice).

The problem is the likelihood that we're fueling al Qaida recruitment with our actions in Iraq, combined with our lack of nation-building success in Afghanistan. It isn't that we're being unsuccessful in fighting al Qaida in its current form, it's that we may very well be sowing the seeds for a stronger al Qaida in the future.

I guess I worry that they may be gaining their footing again right about now, and that they probably have *plans* of one kind of another.

Even if that's true, I think it's best to take a balanced view of what the current administration is doing. We won't get that balanced view from any of the Democratic candidates, because it's their job to criticize. But we want to keep it in mind in coming up with a reasonable security strategy.

Posted by: William Swann at September 12, 2003 01:58 PM
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