Monthly Archives: April 2011

Tax Day Special: Tea Partiers, et al, and the conceptual poverty of “lower taxes”

(Also see this video, which is more to the target demographic.)

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Among Tea Party types, “lower taxes” is a hallmark demand. I would call this a unifying thread, but that would falsely suggest there is much more to many of the participants; often, “lower taxes” is about it. There is of course “reduced spending,” but this marks a difference which makes no difference. And there is a reason Tea Baggers choose Tax Day to protest spending (and immigration, and Muslims, and all the rest).

Bad history from the getup

“Tea Party,” then, is probably a misnomer. At bottom the Boston Tea Party had little to do with “high taxes.” First, it was as much a protest against tax relief against taxation of any kind. The colonists were aggrieved that King George had granted his tea-merchant cohorts a tax exemption—a tax cut, if you will, recalling our own would-be King George of late—among other favors having nothing to do with taxation at all. Second, the revolt couldn’t have been about “high taxes” because the colonists’ taxes weren’t high.

British citizens in the homeland were being taxed up to fifty times what the colonists were, to artificially fund the lifestyles of the latter. Of course, the colonists were upset about the ”without representation” part of being taxed. But the Tea Bag folks are represented—at least, in the sense that the colonists were on about.

The incoherence of “lower taxes”

It is fair to ask: But what’s in a name? We must look at the substance of the protest.

With other conservatives, Tea Baggers are notoriously poor at naming just what they would cut from the federal budget (i.e., just which “taxes” they would “lower.”) But their demand means absolutely nothing without this content. The failure to specify becomes worse when you consider that they intend “lower taxes” as a virtue, a general recommendation: It is not just low taxes for this or that budget, but for budgeting; thus, the details can’t be spelled out in advance. I argue that this abstractness makes the “lower taxes” mantra worse than incomplete; it is incoherent.

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Bear with me. I could see if somebody wanted no taxes whatsoever. This isn’t my position, but it is clear and coherent.

Likewise, I could see if they wanted taxes to fund only certain things and not others. This would not be so far from the first position; instead of “no taxes for anything,” it would be “no taxes for this thing.” Again, this is clear and coherent. And formally speaking, this does describe the Tea Bag position; for instance, they want taxes for defense, but not for (certain) health care.

But then, why their focus on “lower,” plain and simple? I mean, lower for health care, OK; but then what for defense, and all the other things they want to tax for? Once they drop the health care budget, can we, say, jack up every other region of taxable spending by more than the “liberals” ever dreamed of paying for health care alone?—Or jointly depress them to less than health care was before the drop?

I just don’t know what to do with “lower taxes.” It gives us only slightly more direction on budgeting a nation as “no live tigers” gives us on decorating a home.

Economic versus moral arguments for “lower taxes”

There is more than one kind of argument against (high) taxation emerging from this camp. Some ground the position in rights and justice—people have a right not to be taxed, or a right to their taxable income. Here, however, I’m interested in a different argument: The idea that taxation should be kept low so that people can “keep more of their money in their pockets.”

This is the argument you hear first and oftenest from Tea Party types. And one expects that; these “bread and butter” concerns (or “materialist” ones, for the Marxists present) are, I think, a necessary condition for mobilizing large groups of people in protest. Sure, there will always be some who march and shout on bare principle; but I imagine if Obama pounded through a bill that raised everyone’s taxes by 5%, but raised their wages by 200%, the “Tea Parties” would dry up post-haste, “principles” clunking in tow.

Yes: In theory, taxes could contribute to, even create, financial insecurity for taxpayers. But just how does “needing more money” relate to “lower taxes”? I mean, if the issue is simply “having,” why make a fetish of “keeping my money” versus “making more in the first place”? For an increase in either will result in an increase in “having.” In theory, TP’ers could talk about taxes, or wages, or both—right?

What’s more, “earning” or “making” occupies a kind of intuitive, quasi-logical priority over ”keeping”: To use an analogy, if I am a farmer who is vastly underproducing her crops, I am probably not going to focus the bulk of my complaints on the carrots the rabbits steal after the harvest. My point is, unless the issue is pure, distinterested procedural justice, bitching about taxes only makes sense if you are getting “enough” in the very first place.

Why the real problem is (and must always be) wages

Some considerations

It is true that, by some measures, the tax burden for most non-wealthy sorts has increased over the last, say, thirty years. (I don’t intend to argue that here.) But other facts suggest that the economic problems affecting most rank-and-file Tea Baggers (and other lower and middle earners) are due primarily to wage and benefit deficits, rather than taxes taken out after the fact:

(1) During the same 30-year period, consumption levels have been maintained by this group only because of an explosion in consumer debt. In turn, this reflects a decrease in real wages across the same period.

(This, in relative and absolute senses, e.g., the share going to low and middle earners, as well as the per- dollar spending power of this share.)

(2) This decrease in real wages has outpaced any rise in taxes.

And most importantly,

(3) The gap between the value of what this group of wage earners produce at their jobs, and what they are paid for it, is far greater than the gap between what they make and what they would make if they kept what is presently taxed.

(Note: Any alternative to this (3)-scenario—that is, any reversal in the relative sizes of the two “gaps” in question—is utterly unthinkable. The net worth of the entire working class is less than the dollar-value of their collective alienated production; long before they could be taxed enough to rival the latter, they would run out of money, stop buying the products they make, and the economy collapse.)

A “tax relief dividend” versus a “productivity dividend”

To illustrate the enormous import of this last point, consider economist Juliet Schor’s observation that “since the 1970’s, labor productivity has roughly doubled.” This means that today, we can reproduce a 1970s standard of living (measured in ”marketed goods and services”) in half the time it took then.

Schor’s main emphasis is on the extra free time this could mean for workers. But the productivity dividend can be viewed in ‘material’ terms as well. It means, conversely, that across the period in question, we could have doubled the standard of living for each worker without increasing the work day. Needless to say, recalling point (1), nothing even close to this has happened. The dividend has been reinvested back into the productive apparatus itself (and luxury consumption for the capitalists) rather than the pockets of workers.

Clearly, there is simply no way any parallel “tax relief dividend” could compete with this “productivity dividend.” The added standard of living which could have accrued if workers kept everything they earned since the 70s comes nowhere close to what they could have earned in the first place.

All of which suggests that the employer class, rather than the state, is the proper primary target when it comes to materialist grievances.

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A possible Tea Party response is to say that the state is a fairer target than the owning class. The state is “unjust” in (over)taxing, as it lacks any claim to the contested funds in the first place. Employers, on the other hand, have property rights to the productive yield; while it might be nice if they gave workers more, they are not under the same moral obligation as the state. As employees, we are only in a position to ask; as citizens, we can make demands.

This moves us from the economic-materialist realm of argument to a moral, rights-and-justice based one. Though we’ve focused on the former, most Tea Partiers will in reality appeal to both. But this dual approach suggests an incoherence of its own.

Appealing to rights at this point seems to invalidate the ‘material’ complaint we began with—and the same could be said of most formulations (or formulators) of “laissez-faire.” They are asking us to believe: “Yes, it is morally wrong to violate property rights in order to enhance human welfare; and it would remain so even if heaven fell blazing to earth as a result of maintaining this principle. (For how could a mere want override a right?) But hey, whew, wonder of wonders: Gratefully, it only so happens that respecting these rights is the best way to maximize human welfare anyway! (If it weren’t, though, we’d still have to bite the bullet and respect them.”)

(I for one find this counterintuitive in the highest. I mean, holy shit, what are the chances?)

Final thoughts

A scalpel not a cave-club

What a person “has” is determined by a complex of earnings, benefits, expenditures, taxes, waste, and so forth. Each of these could be sub-typed as you wish; there are different sorts of earnings, expenditures, etc. Opposing “high taxes” amounts to arbitrarily opposing a certain “type” of expenditure rather than the net, balanced outcome of credits-versus-debits. This approach is like that of someone who had gotten lost by making a wrong left turn, and so began opposing all left turns, rather than just working to combine left and right turns in such a pattern as to best get from A to B. It is not so much left turns, but the specific “mixture” of left and right turns which gets one lost (or indeed, which gets one to her destination when the journey is a success).

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