The conservative movement believes it’s unfair to make rich people pay higher tax rates than others, and it has made this belief the central precept of the Republican agenda. The problem is that it’s not a popular belief — most Americans, even a majority of Republicans, favor higher taxes on the rich. So the movement characteristically engages in a series of evasions, designed to exaggerate the relative burden paid by the rich and downplay the burden upon the non-rich, rather than to defend conservatives’ actual beliefs.
That was the point of my piece from a couple days ago. A couple responses I’ve seen from conservatives further prove my point.
National Review blogger Reihan Salam, a former colleague at the New Republic, is a very smart guy who writes lots of interesting things (most recently here), but has an unfortunate habit of defending silly yet influential Republican arguments by consciously ignoring them. In keeping with this method, he does not attempt to defend the pervasive, misleading claims about the tax burden that were the subject of my piece. Instead, in response to me, he offers up scattered musings of tenuous relevance.
Let me pluck out the points of quasi-relevance. Reihan critiques the pertinence of my data:
Raising taxes would presumably have no income on market income inequality. Rather, it would have some small impact on post-tax inequality. This is one reason why we tend to look to post-tax-and-transfer inequality to get a good understanding of the shape of the economy. Yet we’re presented with charts showing average household income before taxes.
Here is the chart I posted:
If Reihan will turn his head ever so slightly to the right, he will see that I did in fact post a chart showing the rise in after-tax income inequality. In any case, I don’t see the point of his objection, even if I hadn’t. Surely the fact that the rich have taken home virtually all the income gains of the last three decades has some bearing on the question of how to allocate the tax burden.
I argued that “Deficit reduction is (or is, at least, very close to) a zero-sum resource-allocation question.” Reihan replies by citing the possibility that the government might find ways to do more with less. That’s perfectly swell. Every president has tried it, none have enjoyed more than slight success, but maybe we can do better. But there’s no way to close the long-term deficit just by making government do more with less. Therefore, we’re back to the zero-sum resource allocation question — lower taxes for the rich means more cuts in other things. You can argue that lower taxes for the rich and lower Medicare benefits beats higher taxes for the rich and higher benefits, but you can’t wave the magic wand of more efficient government to make the question disappear.
Reihan also describes raising taxes on the rich as “raising marginal tax rates.” In fact, President Obama’s proposal would not touch their marginal tax rates, but would instead reduce the value of their deductions. This error seems symptomatic of his desire to engage with imaginary arguments rather than the ones actually being put before the country.
Meanwhile, Conn Carroll of the Washington Examiner edges closer to the point, without hitting it:
Chait attempts to answer this question with a dubious study from the Center for Tax Justice purporting to show that the highest-earning 1 percent take home 20 percent of the national income and pay 21 percent of the total taxes. The CTJ study is based on a model which claims to factor in all state and local taxes in addition to federal ones. Using these numbers in a debate over federal taxes is highly misleading.
So he thinks the CTJ computation of the total federal, state, and local tax burden is “dubious” and “misleading.” But why? Carroll doesn’t argue that it’s inaccurate. He merely thinks it’s somehow wrong to consider the impact of local and state taxes.
I’m relieved to finally find a conservative willing to openly say that we should make federal tax policy without any regard to the impact of state and local taxes. But Carroll offers no support for this idea, and it seems like a strange one. Suppose state and localities raised their revenue entirely from the very rich, the federal taxes were flat, or slightly regressive, and liberals complained that the rich were getting off easy. Wouldn't the fact that the rich would be getting socked on their state and local taxes have some relevance? Is it really crazy to formulate a view with regards to how much different groups should pay to the government as a whole?
I’m inferring Carroll thinks the burden of state and local taxes, which falls more heavily on the poor than the rich, has nothing to do with the burden of federal taxes. Therefore we have to think about the distribution of federal taxes without taking state and local taxes into account. It would seem to follow that the reverse must be true — we have to consider state and local taxes on their own, without taking into account the impact of federal taxes. Does Carroll think it’s unfair that these taxes are so regressive, then? Should state and local governments cut taxes on the poor and raise them on the rich?
I doubt he believes any of these things, or has even given much thought to the question. It’s simply another case of tossing anything against the wall to avoid the question at hand.