Monday, August 9, 2010

A theory on the debate on taxes

How out of touch is Washington? I don't think there's a clearer place to find the answer than on the debate about taxes. My sense is that there are roughly two groups of any numerical significance in America when it comes to taxes: let's call them the bristlers and the shruggers. The bristlers are the people whose neck hairs bristle when the word tax is uttered. The existence of taxes makes them angry. The shruggers are people whose reaction to taxes is a shrug. They don't like paying taxes and wish they could pay less, but they take the whole thing philosophically and realize that things like roads and bridges don't pay for themselves. It's wrong to view this as a Republican vs. Democrat fight, as I've met quite a lot of Republican shruggers in my day (though no bristler Democrats as of yet). The irony is that many of the bristlers, as we've constantly been reading, benefit enormously from tax-funded programs like Medicare and farm subsidies, but the entire bristler schema is based on an ignorance of government finance and a lack of self-awareness and empathy, so it's not that surprising. My guess is that the shruggers outnumber the bristlers by at least 4-to-1, give or take a few percent. In a normal polity, this would make the Rand Pauls and Mike Pences of the universe a small, laughable fringe, but it turns out that the bristlers are not normally distributed by geography, age, socioeconomic status nor ethnicity, and they all cut in ways that are politically advantageous to their cause. (There is another group of people who actually like paying taxes, but they are very uncommon outside of the wealthier part of the Democratic donor base in my observation.)

It would seem natural enough for the Democrats to become the party of the shruggers, but there are obstacles to that happening. For one, there are some Democrats who come from more bristler-heavy states, and they can't be seen as tax-friendly. There's the campaign finance issue, in which lots of rich bristlers hold undue influence over wealthy shruggers (such as, for example, Warren Buffett). So, you see self-proclaimed deficit hawks like Evan Bayh arguing for budget-busting regressive tax cuts because he represents a "red" state and even though he's not running for re-election, he'll probably run for governor of Indiana in 2012 and he needs to keep in good graces with the money men. It's crazy, but it makes sense according to its own crazy rules. Perhaps one could call it the David Lynch school of tax policy.

So you read something like this, and you just know that Ezra Klein is right, and that Democrats will not hold the line on the Bush Tax Cuts. It's just one of those disheartening episodes where you know the bad guys are going to win because the good guys aren't going to be able to count on the Blue Dogs to have their backs. I guess the only thing that softens the blow is the knowledge that there's now way the GOP will win this battle in the long run just based on the fundamentals. If our current course remains unaltered, we will eventually face a debt crisis that will require cutting spending and/or raising revenue. Democrats generally have no problem raising taxes if necessary, as the health care reform battle proved. Republicans, though, will never support actually cutting entitlement spending. They will definitely never support cutting defense spending. Doing the former would hurt their most voluminous constituency--seniors--and the GOP learned their lesson here after they tried to privatize Social Security and watched seniors vote big for Democratic congressional candidates in 2006. Even the most right-wing Republicans cannot even name where their oft-mentioned cuts will come from. What this means is that the Republicans elected this year will enter office with lots of talk about "cutting spending" but no agreed-upon targets or even proposals to take on numerous powerful interests that are pretty good at protecting themselves. Frankly, it sounds like Clintoncare to me, which failed because the lack of a plan led everyone to try to advocate for their own plans. Democrats interpreted the lessons of that experience correctly in 2007 and unified behind the Jacob Hacker-inspired plan that eventually passed. Evidently Republicans took the wrong lessons from Bush's Social Security loss, and forgot that wishy-washy election themes coupled with aggressive action after the election usually lead to big failures, and this really is a recipe for failure.

The Man, The Myth, The Bio

East Bay, California, United States
Problem: I have lots of opinions on politics and culture that I need to vent. If I do not do this I will wind up muttering to myself, and that's only like one or two steps away from being a hobo. Solution: I write two blogs. A political blog that has some evident sympathies (pro-Obama, mostly liberal though I dissent on some issues, like guns and trade) and a culture blog that does, well, cultural essays in a more long-form manner. My particular thing is taking overrated things (movies, mostly, but other things too) down a peg and putting underrated things up a peg. I'm sort of the court of last resort, and I tend to focus on more obscure cultural phenomena.