The FT carries the most interesting article I have found in the media this morning. It starts by saying:
The Republican party's raison d'être is cutting taxes. It may even be its divine commission. God put Republicans on earth to cut taxes, the conservative columnist, Robert Novak, once said, and failure to do that means “they have no useful function”.
And it continues:
Republicans should pray for a new purpose.
Justifying that by noting:
Big tax cuts, particularly for the wealthiest, do not work in an age of high inequality and heavy debt. Republicans need an economic agenda that respects markets while also recognising the challenges facing America and its anxious middle class.
Because:
First, voters do not much care about taxes. Unlike a generation ago, more than half think their taxes are fair, according to a Gallup poll.
And:
Second, America's fiscal situation makes deep tax cuts implausible.
Which means:
Third, tax cuts look like an answer desperately searching for a problem.
All of which made me presume that this was something from someone associated with the Clinton or Sanders campaigns. But it isn't. The author is someone called James Pethokoukis, and as the article notes:
The writer is a scholar at the American Enterprise Institute
The AEI is, in my experience, one of the classic US libertarian, right wing think tanks. This is not where such opinion should come from. But as it does let me venture to suggest that the whole article can be summarised by the suggestion that tax cutting has run out of road.
People have realised that taxes are essential to ensure redistribution. And they're linked to a growing economy. Whilst the sense of well being that is created by the public services with which they are associated is key to the sense of community that was part of the American dream.
To out it another way, there is a Joy of Tax.
And the US, and the Republicans in particular, may have missed that fact. One article in the FT does not prove that, but it certainly is interesting.
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“Run out of road”
Maybe. Has the tax-cutters run out of ‘Unsurfaced Road’, ‘4WD Vehicles’ and ‘Road Closed’ signs for the tarmac roads that are being downgraded to gravel in rural America?
They still vote Republican in the counties that are forced to do grind up and grade down the metalled roads they can no longer afford to maintain.
I do not doubt that broad and well-maintained highways serve the factories and mines of the Koch brothers. Which is to say: cutting taxes hasn’t run out of road to the voters that matter.
When the model of pandering to billionaire donors and buying elections by media ‘spend’ runs out of road, I’ll believe in political change.
My guess is that tax cutting will run out of road when the donors pay no tax at all – and we’re pretty close to that – and they’ve found rents that represent a call on the resources of the state that needs a tax base from the citizen.
But an economy dominated by rent-seeking may provide a more efficient income stream directly from the citizens, at which point a rump ‘state’ voluntarily supported by the rich insofar as it enforces the collection of rents is the probable end of the road.
I can think of a better way to ensure redistribution. It’s called free trade. The rich have erected so many barriers, both legal barriers and tariffs, that prevent poorer people entering markets and selling goods and services they want to sell.
Disabled people excepted of course who will need targeted spending to achieve redistributional aims.
( Btw, I thought taxation was about preventing inflation only a few days ago. )
You really do need to read The Joy of Tax
There are six reasons for tax
The U.S military budget cut way back and put on social programs would be a start. Although its so bloated you could probably appease the tax cutting crowd with some social programs if combined with tax cuts. Just look at Costa Rica supposidly left wing yet it has a income tax rate of no more than 20% and no estate tax either, yet things are no worse than the u.s or here.