For Democrats, Taxes Aren’t about Revenue

The question about taxes is, largely, a technical one, not a moral one.  If government is going to spend x, then it is going to need to collect x in taxes — either now, or it can run deficits in the present and collect the same taxes in the future with interest.

There isn’t any perfect tax regime, but there are better and worse ones.   For example, some taxes — American corporate taxes, for example — can get very, very complicated, and so complying with them in the most efficient way is very, very expensive for taxpayers.  General Electric spends a ton of money figuring out how to not pay any more tax than it has to.

Taxes can also distort individuals’ and businesses’ economic activity.  You end up with businesses making a lot of decisions that are inefficient from a production point of view but efficient from a tax point of view.  That’s pretty much the definition of a bad tax system: when the tax code leaves businesses better off making what would otherwise be bad business decisions.

So, ideally, you want a tax system with low transaction costs (meaning a low cost of compliance) and one that doesn’t distort a lot of economic activity.  You want to get enough money to fund your government programs with as little disruption to life as possible.

That taxation should have been converted from a technical question into a moral crusade speaks to the basic failure of the progressive enterprise in the United States and to the deficiency of American political discourse.

Moral hysterias are always a distraction from problems that are, if seemingly intractable, much more ordinary. The specific contradiction in this case is the progressive demand for a Scandinavian welfare state at no cost to anybody they care about, which ends up being a very difficult equation to balance, probably an impossible one.  And when the numbers don’t work, there’s always cheap moralistic histrionics.