[Posted by Neil H. Buchanan]
Last week, in a guest column on FindLaw, I discussed an argument that the Wall Street Journal's editorial page has been pushing recently. (The column to which I was directly referring was published under the byline of former Bush press secretary Ari Fleischer; but as a friend of mine says: "I always imagine (based on nothing at all) that they just have some guy locked in a little room churning this stuff out and they stick the names of different famous people on different versions of the argument on different days.") The argument boils down to this: We know that the U.S. tax system is excessively redistributive because the richest 10%, say, of all taxpayers pays some much larger percent of all taxes (by Fleischer's ghost writer's account, 71% in 2004 -- conveniently ignoring everything but federal personal income taxes). As with all such statistical distortions, the comparison has a wow factor, and it's not just wrong but based on a completely dishonest standard.
In particular, the only way to satisfy the implied measure of fairness -- a tax system that would NOT be excessively redistributive -- is if 10% of taxpayers pay 10% of taxes, if 40% of taxpayers pay 40% of taxes, etc. This, though, is only possible if every taxpayer pays the same number of dollars as every other taxpayer. Not the same percentage of their income in taxes, but the same number of dollars. If the government is going to collect $3 trillion in taxes from 300 million people, then each person's annual tax bill must be $10,000. No consideration of income or employment status. No retirees or disabled citizens excluded. No child left untaxed. (The last time a major government proposed even a modified version of such a system was in 1983 in the U.K. under Margaret Thatcher. Thatcher's idea to impose what the Brits call a "poll tax" was met with riots in the streets.) Even highly regressive tax systems do not satisfy the implied standard, so long as any person pays less than any other person in dollars paid in tax. Thus, conciliatory comments to the effect that "[w]e have an obligation to help the neediest among us and the wealthy should pay more" are meaningless.
This argument is merely the latest in a long line of dishonesties from the Journal's editorialists and an influential band of anti-tax ideologues. (The Wall Street Journal itself, for those who don't follow these things, is an excellent newspaper. The editorial page is an entirely separate operation, aggressively pushing a very particular brand of pro-Bush conservatism.) A few years ago, the Journal's editors opined that the people who are exempt from federal taxes because of their low incomes are "lucky duckies" because they live in the happy world that the Journal's editors would like to live in: a blissful land free of taxes -- never mind the inability to pay for necessities, and never mind that the duckies continue to pay sales taxes, excise taxes, payroll taxes, etc., and that they die much younger than richer people do. I guess it's a sign of progress that the argument is now being repackaged into something that is at least initially not laughable.
There are honest disagreements between conservatives and liberals about the appropriate size of government, about solving social problems with government programs or with private initiatives (or some combination), about how to deal with government waste (and how prevalent or unavoidable waste is in the first place), about the social and economic incentive effects of taxing and spending, etc. That's what tax policy scholars spend their lives thinking about. No policy analyst will ever be happy with the level of public discourse about the subject of their expertise, of course, but it is particularly disheartening to see major opinion leaders (and the politicians who echo them) defining fairness in taxation in so fundamentally dishonest a fashion.